David Davis concedes Brexit financial deal will probably favour EU

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David Davis has conceded that Britain’s Brexit withdrawal agreement is likely to favour the European Union in money terms but insisted that the future relationship would favour both sides.

His comments, which could be designed to soften people up to the idea of a hefty multibillion-pound financial settlement, came after the government said it was accelerating domestic preparations by hiring 8,000 new civil servants.

The Brexit secretary told a House of Lords committee that talks with the EU would resume in the latter half of next week, and that he hoped to make a breakthrough by December that would allow negotiators to move on to Britain’s future relationship with the EU.

He insisted that he was not about to make a “big offer” on the biggest sticking point so far – the size of the financial settlement – but did admit when agreement was reached it could be a sore point for the UK, although he did not put any likely figures on the table.

“The withdrawal agreement, on balance, will probably favour the [European] Union in terms of things like money and so on. Whereas the future relationship will favour both sides and will be important to both of us,” he told peers.

Davis was asked why he could not put forward a proposal to settle the money question given that it was becoming a make-or-break issue that was stalling progress.

He responded that it was not the only key point – and that his job was to represent British taxpayers.

“There are going to be a number of issues going through this negotiation which will be fundamental,” he said, listing the regulatory relationship between the UK and EU and the treatment of financial services.

“There will be a whole series of these. I won’t be coming in front of a committee to say yes I’m going to fold on this. Ever. Not on any of those.”

Davis argued that it was unsurprising that one business group had urged him to pay as much as £100bn to settle the bill quickly because companies were not taxpayers. “Of course people who are solely beneficiaries but aren’t paying in the £100bn or £20bn or whatever will say they want this done. Of course. Similarly they wanted an implementation period, we hope to deliver but it won’t come for free,” he added.

Former chancellor Alistair Darling warned that a Brexit trade deal with the EU could take up to five years to negotiate and there is a 50% chance of a “car crash” in talks with Brussels along the way.

The Labour peer said Theresa May needed to set out what her aim was for the negotiations, claiming that at the moment the UK was “walking through a snowstorm” and could end up falling over a cliff.

“I think a deal will be done, but I think it may be four to five years before it is done, at least,” he told the Lords EU select committee. “There’s maybe a 50% chance we reach the end of this process with a traditional car crash followed by the traditional crisis meeting late into the night, we agree to roll the thing over. Greece is a good example of how things don’t get fixed despite the fact everyone says they want to fix them”.

The Brexit secretary also hinted that the government could concede on a key amendment to the EU withdrawal bill that would require the final Brexit deal to be approved by statute passed by parliament.

Davis said he would not comment specifically on reports that ministers were ready to back down on the issue laid down by the former attorney general, Dominic Grieve.

“We are going to listen carefully to the debate and listen to what people say,” he said, admitting this procedure would be “much more complex” than the article 50 legislation and “not designed to be untouchable”.

Earlier Downing Street had revealed that more than £660m had already been committed to the Brexit effort, and that new Whitehall staff dedicated to Brexit would cause the government’s headcount to balloon by up to 8,000 by the end of next year.

The prime minister’s official spokesman said that 3,000 new posts across government had already been created, including 300 additional lawyers, with HM Revenue and Customs confirming a maximum of 3,000 to 5,000 new workers by the end of next year. The figure will be higher if there is no deal achieved by the government.

The figures were included in an update at cabinet, with Davis telling colleagues that the extra resources were being used to fund 300 programmes already under way across government.

There will also be two new cabinet sub-committees to discuss domestic preparations for Brexit, and the progress of the negotiations – with the environment secretary, Michael Gove, who was a key figure in the Vote Leave campaign, taking up a position on the latter group.

It came as Labour prepares to force a binding vote in parliament on Wednesday that it hopes will force ministers to publish 58 studies on the economic impact of Brexit.

The party believes that it can use an old parliamentary procedure on Wednesday to give the House of Commons the power to require ministers to release the papers on Brexit’s economic impact. The opposition is demanding the papers be released to the House of Commons’ Brexit select committee, which would then have the right to review the materials and determine what information is put in the public domain.

“This debate is about transparency and accountability. Ministers cannot keep withholding vital information from parliament about the impact of Brexit on jobs and the economy,” the shadow Brexit secretary, Keir Starmer, said.

“Labour recognises the importance of protecting the government’s negotiating position with the European Union. However, that does not give ministers the right to impose a blanket ban on publishing any information whatsoever about the economic impact of Brexit.”

He called on the prime minister to stop sidelining parliament in what he described as the “most important negotiations since the second world war”.