Theresa May soothes the Brexit jitters: No cliff edge when we quit but deal will cost billions, PM warns
Theresa May yesterday opened the door to taxpayers continuing to pay billions into the EU on ‘transitional’ terms when Britain leaves in March 2019.
In a major boost to the City, the Prime Minister told businesses they would not face a ‘cliff edge’ when we quit the Brussels club.
Her announcement triggered fevered speculation that ministers will strike a so-called ‘transitional deal’.
Under this arrangement, UK firms will continue to have access to the single market while free trade deals are hammered out. In return, Brussels is expected to demand that Britain continues to send billions of pounds to the EU every year and abides by the trade rulings of the European Court of Justice.
Eurocrats could also push for free movement of workers to remain in place. Government insiders said they understood that ending free movement was the public’s ‘No 1 priority’ – hinting it would not be part of any transitional deal.
Tory MPs said it would not be ‘viable’ for the Conservatives to be knocking on doors in the May 2020 General Election if free movement had not been curtailed.
City giants have spent the past few months pushing for a period of ‘transition’, rather than Britain quitting the single market altogether in March 2019.
Yesterday, Mrs May told the CBI annual conference that she understood ‘people don’t want a cliff edge, they want to know with some certainty how things are going to go forward’.
She added: ‘Obviously, as we look at the negotiation we want to get the arrangement that is going to work best for the UK and the arrangement that is going to work best for business in the UK.’
The comments were in response to a warning from CBI president Paul Drechsler, who 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.’
Leading Tory Eurosceptics said they were ‘relaxed’ about the idea of a time-limited transitional period – provided that, at the end of it, Britain took control of its own borders and laws and was free to negotiate its own trade deals.
The Cabinet ministers in charge of Brexit are also understood to have no objections.
Tory MP Steve Baker, a leading Eurosceptic Tory, said: ‘There is a huge amount of trust in the PM to deliver on the pledges that she made in her speech the Conservative Party conference.
‘The PM needs the maximum freedom of movement to deliver a good quality withdrawal agreement.’ Fellow pro-Brexit campaigner Dominic Raab added: ‘The Prime Minister is right to retain some flexibility on this. What matters is getting the best deal for Britain, not the technical process.’
However, MPs made it clear there must be a fixed time period and the process must not be allowed to drag on. One privately warned of an ‘implosion’ in the Tory Party if the arrangement was open-ended.
Eurosceptic MP Andrew Bridgen warned that the EU would seize on any opportunity to seek to delay Brexit. He added: ‘That will exasperate the electorate who voted to leave in good faith. The will of the people delayed is the will of the people denied.’
Richard Tice, co-chairman of Leave Means Leave, said: ‘A transitional deal will fuel more uncertainty and leave Britain in limbo.
‘British voters have made it clear that they want to leave the EU and the Government must deliver on this in full and at the soonest opportunity – two years after triggering Article 50, or sooner if the EU fails to negotiate.’
Yesterday Sir Oliver Letwin, ex-policy chief to David Cameron, said it would be ‘relatively easy’ to strike a trade deal on goods.
The Remain campaigner said: ‘The value of what is exported to us exceeds the value of what we export to the EU.
‘There are powerful commercial and industrial interests on the other side of the negotiation who want to be able to continue to compete effectively for the English market against the American, Japanese, Indian and Chinese.’
Meanwhile, Lloyds said UK workers had record job security.
A record 82 per cent of people feel confident in their personal job security, a rise of two percentage points since September and up four points on October 2015.
November 22nd, Daily Mail