Leo Varadkar set to block next stage of Brexit talks

The Taoiseach has said he is not optimistic that the UK will be able to do enough by next month to move onto the next phase of negotiations on Brexit.

The Government, which has the power to prevent the talks progressing, is adamant that talks to date have left the sides not even close to where they need to be in order to enter phase two.

The refusal by Mr Varadkar to allow London to move onto the next phase will likely frustrate UK prime minister Theresa May who wants to hammer out a fresh deal on future relations with the EU.

At a Fine Gael pre-Dáil conference in Co Tipperary, the Taoiseach sent out a stark message to our strongest trading partner, the UK, saying Ireland would not allow London to begin negotiating its future with the EU.

EU leaders have agreed that sufficient progress must be made on three issues — the Irish question, citizens’ rights and the UK’s exit bill — before Brexit talks between the Union and the UK move to phase two.

However, any reluctance by Ireland or other states to approve this will result in leaders at a special summit next month in Brussels failing to agree to the next phase of talks, a move which could threaten the stability of the negotiations with the UK.

“At the moment, I’m not optimistic that it will be possible to come to the view in October that we are able to move onto the next phase in talks,” Mr Varadkar said.

“The guidelines that we set out as European heads of government was that we want to see special progress, not just on issues relating to Ireland where there has been quite a lot of progress actually, but also on the financial settlement and citizens rights. As of now, enough progress hasn’t been made for us to go onto the next phase of talks.

“But that can change, there are a number of weeks to go yet,” he said.

Foreign Affairs Minister Simon Coveney, who is co-ordinating Ireland’s Brexit talks, also agreed that it was unlikely that phase two would now go ahead.

“I don’t think we are close to being where we need to be in order to move from phase one to phase two,” he said. “That will be a decision between leaders. But unless there is a significant further move from the British government between now and the middle of October, that is unlikely to happen in October,” he said.

Meanwhile, with just weeks to go, Mr Varadkar has given his strongest signal yet that cash for next month’s budget is likely to be increased through revenue-raising measures.

There is an estimated €320m available to the Government for spending on services and tax cuts. But the small pot can be bolstered.

Mr Varadkar signalled yesterday that his ministers would likely now have even more to spend.

“There’ll be no cuts in any department spending this year, every department will have an increase in spending, it’s just a case of how much we can accommodate in the parameters available to us,” he said.

“It would be typical enough for there to be an increase in [the price of] cigarettes, that’s one of the things under consideration. Also, I’m a long-time supporter of the sugar tax and I want to see that introduced next year, but I’m not in a position to get into details,” he said.

The Government last year announced a tax on sugar-sweetened drinks would be introduced in 2018. It said the tax would be introduced in line with similar plans in the UK for April 2018.

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