We were always going to have to pay a divorce bill. The point is trying to extract something in return rather than just handing over a wad of cash for nothing in return. That’s negotiations for anyone who’s ever been involved in negotiation,it’s an obvious tactic. The EU know they’re screwed without our cash, we want a half decent trade deal, they want us to pay the bill without giving anything up to neutralise our advantage, we want to hold onto and leverage our advantage as long as possible and only agree to pay if we’re getting something in return like a decent trade deal, and prepared to pay a premium to get it – better to pay a one-off bill than pay into an open ended annual fee.
It’s really pretty simple at the end of the day. No trade deal, no divorce payment and we’ll see you in court and our legal liabilities to the EU are half a percent of sweet FA. But in that scenario there are no winners as the EU will be screwed and even the most hardened tory brexiteer doesn’t want that.
The budget will be crap by the way. Hammond has no manoeuvring room at all. It’ll be light tweaks here and there, some minor losers, some minor winners, grasping at some low hanging fruit, like the diesel tax. The overall net situation will be unchanged so just a case of shuffling the deckchairs around. Until Brexit happens and we know what the landscape looks like we can’t and shouldn’t make any radical changes at this time.