Hopes of a ‘soft Brexit’ have grown after Theresa May tried to reassure business she wouldn’t force them over a “cliff-edge” when the UK quits the EU.
The Prime Minister’s remarks to the CBI suggested that a transitional deal could be devised when Britain leaves in 2019.
Business and others are increasingly calling for such a deal, in the hope that it would allow the UK to remain a member of the EU single market and customs union until fresh trade relations could be sorted out.
Many firms want a ‘soft’ Brexit, which retains trade links, rather than a ‘hard’ Brexit, which would make curbs in migration a priority and risk full access to the EU market.
No.10 also repeatedly refused to rule out a ‘transitional’ deal, although it insisted that the two-year period of Article 50 for exit talks would not be extended.
The Prime Minister plans to trigger Article 50 – the formal process of quitting the EU – by next March, with the UK finally leaving the bloc in 2019.
Earlier No.10 pointed out that if other EU countries agreed, the deadline could be extended.
But the PM’s spokeswoman later stressed: “We will not be seeking to extend the Article 50 process”.
CBI chief Paul Drechsler warned May on Monday that business didn’t want a “sudden and overnight transformation in trading conditions” that could leave them “stranded in a regulatory no man’s land”.
And in her speech, the PM said: “Others have made this point, that 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 are undertaking with the European Union.”
May stressed that the Government would not “rush ahead” and her official spokeswoman repeatedly refused to rule out the prospect of a transitional deal which would keep Britain in the EU until all practicalities had been agreed.
On extending the two year-long Article 50 timeline, the spokeswoman said: “There is a process where you can extend Article 50 by more than two years, but you need the agreement of all members to do that.”
Asked if the deadline could be extended, she added: “Our focus is on securing the best possible deal.”
The CBI, the City of London and some foreign countries have suggested that a transitional deal on Brexit is the best way to sort the complex issues of trade and the EU customs union that affect companies daily.
The PM’s spokeswoman said that May’s reference to avoiding a “cliff-edge” of Brexit was in line with her preference for a “smooth” exit.
“[The Prime Minister] is expressing the views we have expressed already about how do we secure the best deal for the UK and how do we seek to provide certainty where we can to businesses and people across the UK about the steps moving forward,” the spokeswoman said.
“There are a whole range of issues that are being worked through as we prepare for the negotiations, with a focus on how do we get the best deal for the UK.”
“The basic principle is how do we secure the best outcome for the UK.”
Labour MP Pat McFadden, of the Open Britain campaign, said: “It is good that the Prime Minister understands the dangers of a cliff edge for the economy during the Brexit negotiations.
“Some within her party seem to be pushing for a hard Brexit whatever the economic consequences.”
But some ‘Brexiteers’ in the Cabinet are keen on a quick exit, and Tory MPs warn that a transitional deal could mean the UK is wedded to EU rules into the next decade.
Tory MPs will be determined that the process is resolved by the time of the 2020 general election, with the risk that Brexit could be unpicked by a new Government.
Richard Tice, of the campaign group ‘Leave Means Leave’, said: “A transitional deal will fuel more uncertainty and leave Britain in limbo.”