Britain formally left the European Union on January 31 following several delays. However it remains closely tied to Brussels until the Brexit transition period completes at the end of the year.
According to the Sunday Telegraph the EU sent Britain a demand for an additional £1.09bn, on top of its regular budget payments, on January 31.
The paper reports this bill was paid over the summer removing a potential block to trade talks with Brussels.
Brexit Party leader Nigel Farage strongly condemned the decision to make the payment.
He commented: “Why has the government surrendered an important bargaining chip?
“Weakness never works with the EU.”
Currently the UK is locked in talks with Brussels to secure a new trade deal.
Unless this is achieved Britain will trade with the EU from January 1 on World Trade Organisation (WTO) terms, meaning tariffs on many goods.
Negotiations became gridlocked over the EU’s demands for a regulatory ‘level playing field’, restricting Britain’s ability to deviate from European rules, and continued access to British fishing waters.
However according to the Sunday Telegraph these blockages have been partially overcome and a deal is now “95 percent” done and could be confirmed imminently.
The European Commission insists it was a “coincidence” that the UK received the demand for an extra £1bn, on top of the £9bn regular budget contributions, on Brexit day.
An EU official commented: “The amount of €1.3 billion has been made available on time by the UK, as per the rules on the first working day of June 2020.”
The extra money was demanded after Brussels recalculated what payments it expects from member states, as it does every year, and concluded the UK owed more for the 2019-2020 period.
This was because of the increase in Britain’s gross national income during this time.
However the decision to pay this bill, rather than use it as a negotiating point in trade talks, is proving controversial.
Conservative MP Andrew Bridgen said: “We have weakened our negotiating position.
“We should have said the cheque was in the post.
“Throughout Brexit, the EU has taken every advantage of playing the cad and we accept every disadvantage of playing the gentleman.”
However a Government spokesman insisted the UK will receive about £0.5bn back as a result of the budget rebate negotiated by Margaret Thatcher.
They stated: “We paid our share in June in line with our Withdrawal Agreement obligations and are expecting half the money back through the rebate this month.
“The fact that the EU invoiced us for a vast sum is just one of the reasons why the public voted to leave the EU and take back control of the UK’s money.”
Mr Farage is reportedly planning to rebrand the Brexit Party as Reform UK.
This will put pressure on Boris Johnson not to make concessions to Brussels as well as campaigning on an anti-lockdown and low tax platform.