The UK could pay EU contributions for access to the single market as part of its exit deal, the Brexit Secretary has said.

During a question session in the House of Commons, David Davis said "of course" the Government would consider paying to retain single market access.

Mr Davis was asked by Labour MP Wayne David: "Will the Government consider making any contribution in any shape or form for access to the single market?"

The Brexit Secretary replied: "The major criterion here is we get the best possible access for goods and services and if that is included in what he's talking about then we'll consider it."

After his comments, the pound climbed to a three-month high of €1.19 against the euro and was up two cents against the US dollar at just under $1.27.


Govt have just said to me that it will consider paying EU in return for access to single market post-#Brexit https://t.co/2kT1LS7yNs pic.twitter.com/gg9FNjsI5R — Wayne David (@WayneDavid_MP) December 1, 2016

:: Boris Johnson says he 'supports freedom of movement'

It is the furthest the Government has gone on discussing how it will achieve the single market access it has talked about and his response drew mutters from MPs in the Commons.

The idea of paying any level of contribution to the EU will could anger some Brexiteers, who want a hard Brexit that will see the UK outside the single market.

One of the key claims made by Vote Leave during the referendum campaign was that the £350m a week paid to the EU could go to the NHS instead.

Tory MP and Vote Leave campaigner Theresa Villiers told Sky News: "I think it's important that we use the money we will save on EU contributions on our priorities.

"I would like to see, obviously, a focus on the NHS but I think David Davis is absolutely right that it is unwise to rule in or rule out a whole range of options."

Although not a member of the EU, Norway pays nearly as much in EU contributions as the UK for access to the single market. It has also had to accept freedom of movement rules.

Commenting on Mr Davis's remarks during a visit to Edinburgh, Chancellor Philip Hammond said: "We need to go into these negotiations with as many tools in our tool box as possible, and as flexible an approach as we can.

"We have got a clear idea of what we are seeking to achieve out of these negotiations, but this is a negotiation and our counterparts on the other side will also have their agendas and their objectives, and we need to be flexible in responding to those."

Mr Davis also told MPs that it was Government policy to wrap up negotiations on leaving the EU within two years of Article 50 being triggered - with no transitional deal.

In a speech to businesses last month, Theresa May appeared to hint at a transitional deal to avoid a Brexit "cliff edge".

Liberal Democrat leader Tim Farron said: "The Government are in an absolute mess. We are seeing chaos over their Brexit plans as they keep sending mixed signals on where they stand on basic, fundamental questions like access to the single market, payments to the EU budget and freedom of movement.

"How can the Government claim they have a mandate for their Brexit deal when they don't even know what it is themselves?"