A transitional deal would be a short-term arrangement between the UK and the EU designed to buy the Government more time to hammer out a comprehensive trade agreement.
Speaking at the Confederation for British Industry’s (CBI) annual conference, the Prime Minister said: “People don’t want a cliff edge, they want to know with some certainty how things are going to go forward.
“That will be part of the work that we do in terms of the negotiation that we’re undertaking with the EU.”
Many assume that an interim deal would see Britain remain in the European Economic Area (EEA) while it negotiates a new trade deal with Brussels.
This would allow businesses and banks to continue trading with the EU but would also require the UK to continue to pay into the EU budget while losing influence over single market rules.
It is likely that an interim deal might also delay Britain from regaining control of its borders, as freedom of movement is a non-negotiable condition of EEA membership.
Once Mrs May has triggered Article 50, which she has pledged to do by March 2017, she will have two years to negotiate a new deal with the EU.
But many analysts have said that it could take the Government up to five years to work out a new trade deal with Brussels.
A temporary agreement would help avoid British businesses falling off “a cliff edge”, but might also be seen as a betrayal of the Brexit result.
Richard Tice, co-chair of the Leave Means Leave pressure group, 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.”
Should Britain exit the EU without a new deal or a transitional agreement in place, it will be forced to trade with the bloc on World Trade Organisation terms.
This would see UK-based businesses losing all preferential access, which is why the CBI has backed calls for an interim deal.
November 22nd, Express