UK will make improved offer on Brexit divorce Bill: Chancellor

The Chancellor conceded time is running out to break the deadlock over the UK's withdrawal from the bloc as he reiterated Theresa May's repeated insistence that Britain will meet its obligations to the EU.

Meanwhile, Hammond put himself on a collision course with the head of the NHS as he downplayed a warning from Simon Stevens that the health service needed an extra £4billion of funding to avoid the prospect of waiting time limits being scrapped.

The Chancellor delivered a slap down to Sajid Javid, the Communities Secretary who has called for the Government to borrow billions to fund house building, as he said there was not a "single magic bullet" to resolving the crisis and that "it is certainly not just about pouring money in". Hammond also made a pre-Budget gaffe as he said "there are no unemployed people".

May has been urged to increase her offer on the divorce settlement beyond the €20 billion (£17.85 billion) which she set out in her Florence speech in September.

The EU has stressed that more progress is needed on the issue before it will sign off on talks progressing onto future trading arrangements. Hammond suggested the Government will make an improved offer in a bid to resolve the impasse before European leaders meet at an EU Council summit on December 14-15.

He told the Andrew Marr Show on BBC One: "We will make our proposals to the European Union in time for the council, I am sure about that."

Asked if time was running out to make an improved offer, he replied: "The council is three weeks so yes." Donald Tusk, the European Council president, warned Britain at an EU leaders' summit in Sweden last w eek that "much more progress" was needed on the bill and that British concessions needed to be delivered "at the beginning of December at the latest".

The EU has said it will not have prepared a fresh mandate for trade talks in January if the UK has not made concessions in good time ahead of the EU leaders' summit.

Hammond also cast doubt on calls to provide a significant funding boost to the NHS as he appeared to try to manage expectations ahead of Wednesday's Budget. In a stark message to the Treasury earlier this month Stevens said NHS performance would decline significantly without an immediate cash injection as he made the case for an extra £4bn.