Brexit strains show as No 10 rejects Hammond’s off-the-shelf transition

Brexit strains show as No 10 rejects Hammond’s off-the-shelf transition

Chancellor said to want a ‘standstill’ stage after 2019 Scepticism about whether UK can agree bespoke deal

Downing Street has said the UK will not seek an “off the shelf” model for a postBrexit transitional period, contradicting the position Philip Hammond is believed to have expressed to business leaders.

The chancellor has been pressing for a simple transition arrangement to maintain trading conditions with Europe for at least two years after Brexit, mirroring arrangements the EU has with countries such as Norway and Switzerland giving them access to the single market.

However, No 10 said yesterday: “There were reports last week that we were looking for an off the shelf model – we are not ... Precisely what the implementation model will look like is up for negotiation.”

It is understood that Hammond believes the UK cannot negotiate a bespoke transitional deal in the time available, and that it makes no sense to enter into long negotiations about a temporary arrangement.

The chancellor is reported to have told business leaders that the UK was seeking a “standstill” with full access to the single market and customs union, according to the Financial Times, as well as an “implementation phase” for new customs systems and immigration checks once a permanent deal is finalised with Europe.

A senior cabinet source used that same phrase – “off the shelf” – when describing an implementation deal to the Guardian last week, suggesting free movement to the UK would continue during that time.

Hammond has irritated some cabinet colleagues with one telling the Guardian: “He needs to put a sock in it, stop undermining the boss and get on with his day job.” They said he was guilty of “crazy behaviour”.

The EU has previously said that during any transitional period, Britain would no longer have voting rights in the EU but would need to continue to pay budget contributions, accept rulings handed down by the European court of justice and accept free movement of citizens.

Two off the shelf transitional models that could apply to the UK include European Economic Area membership, like Norway, which includes single market access and exemption from some EU rules, though members pay budget contributions and accept free movement.

The Swiss model, membership of the European Free Trade Association (Efta), means access to EU markets for some but not all areas of trade, with no duty to apply EU laws apart from some trade regulations, though free movement also applies.

There was scepticism in some quarters about the UK’s ability to negotiate a transitional deal that is not based on an existing model. James Chapman, the former special adviser to the former chancellor George Osborne and the Brexit secretary, David Davis, said rejecting an off the shelf model was “madness” given the timescale. “We cannot expend limited negotiating time trying to sort out some new kind of transitional deal,” he tweeted.

Chapman also suggested the UK would have to formally leave the EEA separately from the EU, as all EU countries are automatically members of the EEA. “We haven’t triggered EEA exit and won’t get through parliament if we try,” he tweeted.

A Brexit minister, Lady Anelay, told the House of Lords last week that the UK would formally exit the EEA at the same time as the EU, but hinted that opting for a Norway-style arrangement for an interim period was desirable. “We are trying to achieve the same thing: we want to find an implementation period and interim agreements from the negotiations that will help this country to succeed and achieve prosperity for all,” she said. Amid the debate over the terms of the UK’s exit from the EU, a rightwing thinktank will say in a report today that it believes Britain should abandon tariffs on American and Argentinian meat products after Brexit.

Policy Exchange said the UK should phase out tariffs on agricultural products, saying they raise prices and complicate trade deals, although critics say that would pave the way for hormone-treated beef or chlorine-washed chicken, currently banned under EU law, on British supermarket shelves

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