Chancellor Philip Hammond declared that any “transitional deal” in the period after Brexit must end by June 2022, the time of the next general election.
His comments sparked turmoil within the Conservative government and party – but also led to conflicting messages from the Opposition.
Hammond said that “many things would look similar” the day after Brexit – on 29 March 2019 – as the UK moved gradually towards a new relationship with the EU.
That was seen as an acceptance of a “soft” Brexit and the ditching of curbs on immigration quotas. Tory outrage intensified because Hammond delivered his verdict when premier Theresa May was on holiday
The BBC reported: “The UK is due to leave the EU at the end of March 2019 but there has been increasing talk of a “transitional” or “implementation” stage to smooth the process, before a new long-term relationship with the EU comes into force. This could mean a period during which some EU rules would continue to apply to the UK after it has technically left the bloc. Newspaper reports have suggested these could include the free movement of people, something that was seen as a key issue in the vote to leave the EU.”
Hammond also appeared to acknowledge that it could mean new trade deals with non-EU countries could not be signed during that period.
However, immigration minister Brandon Lewis said it was a “simple matter of fact” that EU free movement rules would not apply after 2019.
The Conservative MP and Leave campaigner Nigel Evans said any transition period should end as soon as the UK had arrangements in place, saying: “This is not going to be seen as a ruse whereby some people who might have liked us to remain in the European Union can see this as an opportunity to keep us half in. That’s not going to happen. We are, in all but one or two transitional arrangements, going to have left the European Union by March 2019.”
Shadow Brexit secretary Sir Keir Starmer said Labour had been calling for “appropriate transitional arrangements” which the chancellor “now appears to accept”.
He said: “Labour has been calling on the Government to commit to appropriate transitional arrangements for a long time. If jobs and the economy are to come first, there can be no threat of a cliff-edge for businesses after we leave the European Union. However, in light of the clear divisions this week within the Cabinet, I hope the Chancellor was not merely speaking in a personal capacity. I also hope that this is the final burial of the flawed proposition that ‘no deal’ is a viable option.”
Shadow Home Secretary Diane Abbott said: “It would be foolish at this stage to take options off the table.” Earlier shadow chancellor John McDonnell made similar remarks – but Jeremy Corbyn has previously suggested the UK cannot remain a member after leaving the EU.
The party’s international trade spokesman, Barry Gardiner, said the UK should also rule out remaining in the customs union beyond any transitional period.
Lib Dem leader Sir Vince Cable said a transition period was only “kicking the can down the road”, adding: “All the problems associated with a hard Brexit, leaving the single market, leaving the customs union, they will simply be confronted two years later.”
Meanwhile, Malta’s PM Joseph Muscat said he is “starting to believe that Brexit will not happen.”