Official document confirms government plans to soften end date for transition period after Brexit
The UK government has softened its position around how long a Brexit transition period should last, with official government documents calling on the EU to rethink its stance that transition should end on New Year’s Eve 2020.
The document, published by the Foreign Office today, states: “The UK believes the period’s duration should be determined simply by how long it will take to prepare and implement the new processes and new systems that will underpin the future partnership.
“The UK agrees this points to a period of around two years, but wishes to discuss with the EU the assessment that supports its proposed end date.”
Although the Prime Minister has always made the case for transition to last around two years, this is the first time an explicit request has been made around requirements, and leaves the period arguably more open-ended than previously thought.
Pro-Remain MP and Open Britain supporter Chuka Umunna said: “The government’s vision for a Brexit transition period should be the final nail in the coffin of the idea that Brexit means ‘taking back control’. The reality is the complete opposite, we are losing control.
“It appears the government wants transition to last indefinitely – a never ending road to nowhere because the cabinet can’t agree on our future trading relationship with the EU .
“As new facts like these continue to come to light, and as the harsh realities of Brexit become clearer, everyone is entitled to keep an open mind about whether it’s the right path for the country. We should not be leaving the EU if we don’t know the end destination of Brexit.”
But Brexit minister Steve Baker dismissed the criticism of government’s apparent change of heart as “a red herring”.
“In a negotiation there is a degree of shift too and fro,” the pro-Leave MP said. “I just would make the point, if there is any movement, it will be from an earlier date, from the EU’s point of view. They want December 2020… this idea that it will be an open-ended transition period is a complete red herring.”
High profile backbencher Bernard Jenkin agreed. He told City A.M. he was “relaxed” about the wording of the document, saying it supported the Prime Minister’s two-year position.
“I don’t think anybody wants the implementation period to be any longer than necessary – except people who want to delay Brexit,” he said, adding it would be “fatal” if the period were indeed open-ended “and for that reason it won’t happen”.
Chief executive of UK Finance Stephen Jones said businesses wanted certainty that transition would continue until a final agreement is reached.
“This is not about delaying Brexit, it is about avoiding a damaging cliff-edge and providing the continuity and clarity that businesses need,” he added.
The document has emerged a day before Theresa May convenes her Brexit war Cabinet for a final showdown.
Ministers including chancellor Philip Hammond, Brexit secretary David Davis, foreign secretary Boris Johnson and international trade secretary Liam Fox will be travelling to Chequers tomorrow afternoon in order to thrash out a final position.
City figures urged the government to grasp the opportunity to deliver certainty for financial services and the wider business community.
Policy chairman at the City of London Corporation, Catherine McGuinness, said: “The UK’s financial and professional services saw a record year in terms of exports in 2016 – up by 15.8% to £95.7bn – helping to balance the goods deficit. It’s vital that services is included within the final deal.
“The EU’s patience is waning, contingency plans are being readied, activity is slowing. We urgently need to see more in the way of a solid commitment from government.
“The UK is historically ambitious. It’s now time to channel this ambition into building a free trade agreement, which would safeguard jobs – not just in the UK, but across the continent – and ensure firms can continue to thrive long after Brexit.”
Miles Celic, chief executive of TheCityUK, added: “If the UK is to secure an ambitious deal which delivers for our economy and for the EU27, it must be one that includes all our leading industries such as financial and related professional services, the creative industries and high-technology. It is through these industries that a global Britain with thrive beyond Brexit. A deal that only covers goods because it is expedient or easy is not good enough – it would not be a deal that is ambitious for Britain or recognises the economic realities of the 21st century.
“An agreement based on the principle of mutual regulatory recognition is the way to deliver the best possible Brexit. It allows for a close trading relationship between the UK and EU, while also giving both sides the freedom to decide their own path to achieving shared goals.
“The stopwatch is ticking down – it is vital that the Cabinet pulls together and unites behind these ideals.”