Prime Minister Theresa May on Wednesday said she was planning to negotiate both Brexit and Britain’s future relationship with the EU by 2019 but a transition period may be required after that.
Appearing before a parliamentary committee, May said companies and government might require time to adjust, in her first comments explicitly evoking a possible transition arrangement to ease Britain’s EU departure.
“I would expect us to be able to negotiate a deal in the two-year period. But it may be the case that there may be some practical aspects that require a period of implementation thereafter,” she said.
Finance Minister Philip Hammond has said such a deal could be “helpful” to “manage the adjustment between where we are now, as full members of the European Union, and where we get to in the future”.
It “would tend towards a smoother transition and would run less risks of disruption including, crucially, risks to financial stability which must be a fairly real concern”, he said last week. ‘Cliff-edge’
Speaking at a summit of the Confederation of British Industry in November, May had alluded to a transition deal saying: “We don’t want a cliff-edge”.
CBI president Paul Drechsler at the same conference said: “Businesses are inevitably considering the cliff-edge scenario — a sudden and overnight transformation in trading conditions.
“If this happens, firms could find themselves stranded in a regulatory no man’s land,” he said.
A report published by the business lobby group on Wednesday called for a “barrier-free relationship with our largest, closest and most important trading partner”.
The CBI report followed a consultation with its members which stressed a holistic approach to business is needed for the Brexit negotiations, reflecting fears the government could focus its attention on the financial sector. “The Government will need to take a ‘whole economy’ approach to avoid leaving sectors behind,” said Carolyn Fairbairn, CBI director-general.—Agencies