U.K. Would Consider Paying for EU Access

Secretary of State for Exiting the European Union David Davis arrives at Downing Street in London. Prime Minister Theresa May’s spokeswoman said Mr. Davis’s comments were consistent with the government’s stated view. ENLARGE
Secretary of State for Exiting the European Union David Davis arrives at Downing Street in London. Prime Minister Theresa May’s spokeswoman said Mr. Davis’s comments were consistent with the government’s stated view. Photo: Getty Images

LONDON—The U.K. would consider making payments to the European Union’s budget to secure the best-possible trade access, the minister overseeing Britain’s exit from the bloc said, in the first acknowledgment of a potential concession before exit negotiations begin.

The comments from Brexit secretary David Davis on Thursday come as the government faces pressure to reassure businesses that Britain would have favorable access to EU markets, even as it tries to drastically reduce immigration.

Official figures published the same day showed the number of immigrants to Britain from EU continues to be at historically high levels, driven by immigration from Eastern Europe.

Mr. Davis told Parliament that the government’s goal was to get the best possible access for goods and services to the European market. In response to a lawmaker’s question on whether the U.K. would consider continuing contributions to the EU to get better trading terms, he said, “Of course we would consider it.”

Making annual payments of billions of pounds after it leaves the European bloc would represent a major concession for the U.K., where voters chose to quit the EU partly on the promise that the country would achieve big savings that could be spent domestically.

Arron Banks, the founder of the group Leave.EU who has advocated a clean break from the bloc, said that Mr. Davis’s comments were foolish and showed he knew nothing about business or negotiation. “The new Brexit secretary reveals his simplicity by conceding on such a fundamental point of contention and throwing away our taxpayers’ money,” Mr. Banks said.

Other non-EU members with close ties to the bloc, though, such as Norway and Switzerland, already make budget contributions for access to EU markets and projects. Even Israel makes contributions to the EU budget because of its participation in the bloc’s major research program, Horizon 2020.

Britain is currently one of the biggest payers in terms of net contributions, at £8.5 billion ($ 10.7 billion) in 2015, according to the U.K. Treasury.

Mr. Davis’s remarks provides a rare window into the government’s approach to Brexit as it prepares for negotiations expected to start by the end of March. Prime Minister Theresa May, who came to office in July, has said she won’t reveal her strategy before talks. But she has broadly said that the U.K. will have control of its borders once it leaves the EU, a demand that EU officials say would cause British businesses to lose single-market membership.

Mrs. May’s spokeswoman said Mr. Davis’s comments were consistent with the government’s stated view.

“Let’s not get ahead of ourselves,” she said. “We are at the stage at the moment where we are preparing for negotiations—they haven’t started.” She reiterated the government’s commitment to cutting immigration, but said it would take time.

The European Commission declined to comment on Mr. Davis’s remarks. EU officials have in the past said the main question around a future British contribution would be in what form it came. For example, additional British military spending that aids EU members such as Poland could be factored in, which could be more politically acceptable in London.

The British pound jumped following Mr. Davis’s comments and was up 0.7% against the U.S. dollar at $ 1.2574 and 0.6% against the euro at €1.1895.

The Office for National Statistics showed net migration rose to 335,000 in the year ended June, the month of the vote, similar to historically high recent levels. It is too early to say what effect the EU referendum has had on long-term international migration. However, the referendum doesn’t appear to have had any impact on migration in the run-up to the vote, the ONS said.

In a letter published in the Times of London newspaper on Thursday, the heads of U.K. food chains including J Sainsbury PLC, Marks & Spencer Group PLC and WM Morrison Supermarkets PLC said that maintaining tariff-free access to the single market would be vital for business. They also said the sector needed access to migrant workers for labor.

Mr. Davis said that he wanted to quickly resolve questions over the rights EU migrants have to stay in the U.K. post-Brexit.

“If were up to us, we would have this resolved in months but we have to get the agreement of the European Union too,” Mr. Davis said.

EU leaders and officials say that any limits on the number of EU workers in the U.K. would restrict one of the bloc’s four freedoms—of labor, capital, goods and services—that make up the single market, and that the U.K. can’t opt out of one principle while opting in to others.

Britain’s economy is closely tied to those of its European neighbors. Britain’s annual exports of goods and services were worth some £2​23​ billion ($ 280​ billion) in ​2015. Exports to the U.S. and China were £95.1​billion and £15.9 billion, respectively.

Write to Jenny Gross at jenny.gross@wsj.com

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