Boris Johnson, UK prime minister, and Ursula von der Leyen, European Commission president, have held secret talks to try to unlock a compromise on fishing access, as they step up efforts to seal a post-Brexit trade deal.
Mr Johnson is exploring an offer that would cut the value of EU rights in UK waters — currently worth about €650m — by about a third, EU diplomats said. That has been rejected by the EU, which insists it will only countenance a 25 per cent cut.
But the intensified negotiations on Monday and Tuesday morning, held at a high level and in conditions of secrecy, are a hallmark of the final stages of EU negotiations, often referred to as “the tunnel”.
Although issues around the level playing field for fair competition have yet to be settled, the fact that Mr Johnson and Ms von der Leyen are haggling over fishing access means it is now widely seen as the main sticking point.
Downing Street said it “did not recognise” a Bloomberg report that Mr Johnson had made an offer of a 30 per cent cut in the value of the fish caught by EU boats in UK waters — Britain had once pushed for 80 per cent.
European diplomats questioned whether Mr Johnson had made a firm offer in the call to Ms von der Leyen. Both sides are, however, testing the parameters of a possible deal without making firm commitments.
Michel Barnier, EU chief negotiator, will brief ambassadors from EU member states and MEPs on Tuesday afternoon on the latest state of the talks.
On Monday, Raoul Ruparel, a former Europe adviser to Theresa May who is well-connected in Conservative party circles, suggested a possible 35 per cent quota cut, phased in over a transition period of five years.
That idea is seen as reasonable by some Conservative Eurosceptic MPs, but Mr Johnson is understood to think that it is too generous.
Mr Barnier has been pushing for a maximum 25 per cent cut phased in over six years: he had previously proposed a maximum cut of 18 per cent, with a transition of 10 years.
Downing Street declined to officially confirm the phone call with Ms von der Leyen but allies of Mr Johnson said that it had been made clear the two leaders would be “in close contact and that will happen from time to time”.
The UK government’s fiscal watchdog warned last month that failing to secure a trade deal would cost the jobs of 300,000 people in Britain next year and inflict a 2 per cent hit on GDP — about £40bn.
By contrast, a five percentage point increase or decrease in EU fishing rights would amount to little more than €30m, the going rate for a mid-ranking English Premier League footballer.
Although much of the focus in the end-game discussions has focused on quota shares and the length of a transition, a more contentious issue relates to what Britain does when the interim period ends.
The EU is demanding the right to retaliate if Britain introduces aggressive quota cuts at the end of the transition period, including imposing “cross-cutting” tariffs in other economic sectors.
Mr Ruparel, in his Politico article, proposed an arbitration panel to adjudicate on whether Britain was being unreasonable, the level of economic damage to the EU and the appropriate level of sanctions.
He also proposed a termination clause allowing the EU, in extremis, to pull out of the entire trade agreement.