“It is inevitable, with ineluctable certainty we are going to end up with WTO rules at the end of this anyway,” he told BBC Radio 4’s Today programme. “We are saying it would be much better to state that now, give business and administrative organisations certainty so they can begin to prepare.”
Paterson said the prime minister could continue to try to reach a free trade deal if the EU relented, but contingency plans should start to be made on the assumption that WTO terms would be adopted. “What we should not be terrified of is the WTO,” he said.
He said EU leaders, who will meet May at a summit dinner in Brussels on Thursday, where she will address them, had a “complete obsession with money” the UK owes to the EU.
Britain could unilaterally decide not to impose tariffs if trade moved to WTO terms, in an effort to protect consumers, Paterson said. “We could decide that would be up to our own elected politicians to make that decision,” he said.
“We have to face the fact that this summit is not going to discuss any future trade deal. We are ineluctably moving down the road to a WTO arrangement, so we had better start preparing for it.
“If they come back, and we very much hope they would, to talk about a free trade deal, that would be a bonus.”
Four former Conservative cabinet ministers – Paterson, Nigel Lawson, John Redwood and Peter Lilley – called on May to walk away from the talks with no deal if the EU continues to refuse to discuss trade.
In a letter organised by the Leave Means Leave campaign, they said the UK should “concentrate our resources on resolving administrative issues” before leaving without an agreement in March 2019.
The shadow Brexit secretary, Keir Starmer, who will also travel to Brussels on Thursday with the Labour leader, Jeremy Corbyn, to meet key EU officials including the chief negotiator Michel Barnier, said threats to walk away were irresponsible. “The last thing we need is threats about walking out because everybody wants a deal. A deal is needed for the UK, a deal is needed for the EU,” he told BBC Radio 4’s Today programme.
“I have talked to hundreds of businesses across the UK and they are all of one mind: we need a deal. So threatening to walk away at this stage is irresponsible.” Labour would not commit to backing any deal, regardless of its content, he said.
“We are not going to do that. It wouldn’t be right for our country to say: ‘Here’s a blank cheque, prime minister. You do the best you can, even if you come back with something that would be damaging for our country; we are not going to challenge you on it,’” he said. “That would not be the proper role of the opposition.”
EU leaders are almost certain to rebuff May’s appeal for trade talks because of the lack of progress on “divorce issues” – the final exit bill, citizens’ rights and the Northern Irish border.
However, it is understood that they will publicly talk up her efforts in the Brexit negotiations, including the speech in Florence, where May set out Britain’s ambitions for a transitional deal, because they fear the prime minister’s political weakness at home will mean she is unable to make concessions on the divorce bill.
A summit on 14 December is the deadline for EU leaders to judge whether the UK has made sufficient progress on the key issues to allow talks to move on to trade.
On Thursday morning, political allies of the German chancellor, Angela Merkel, confirmed that the EU wants the UK to agree to pay up to €100bn (£89.6bn) to settle the bill.
Michael Fuchs, the vice-chair of Merkel’s CDU/CSU group in the German parliament, said the €20bn offered so far by Britain was inadequate.
Asked by ITV’s Good Morning Britain how much the EU was demanding, Fuchs said: “I cannot give you the final figure, but there is a figure of between €100bn and maybe €60bn. Something in between these two numbers should be the right point. This is what the negotiations have to do at the moment. I hope David Davis is coming up with decent proposals, €20bn is definitely not enough.”
Fuchs also confirmed that money was the major sticking point in the stalled negotiations. “There is an offer of €20bn, which is obviously not enough. You can just calculate all the pensions and it’s very obvious that the Europeans don’t want to pay the pensions for the Brits which are living in Brussels. So we have to find a solution on that topic first and then we go on with other topics,” he said.
He described May’s letter to EU citizens living in the UK, sent overnight and posted on the prime minister’s Facebook page, as a positive sign that she was considering the interest of Europeans in the UK.
Asked to respond to the comments about money, Brandon Lewis, the immigration minister, said: “We are in negotiations. We will honour our commitments – we have got a moral duty to do that, but [we need] to work through exactly what it is to make sure what we are paying for is right for Great Britain, as much as it is right for the European partners.”
On May’s letter to EU citizens, Lewis said: “We do value and we want EU citizens to stay. We are very close to having an agreement on this area.
“One of the very common themes across what the EU is looking at and what we are offering is that EU citizens have the right to continue to stay in the United Kingdom. And of course that British citizens have that reciprocal right when they are living abroad in Europe as well.”
More about: #Brexit