Theresa May has denied “begging” for a post-Brexit transition period after losing several weeks negotiating time to her botched snap general election.
The Prime Minister did not not formally propose an “implementation period” until her speech in Florence in September.
However, she claimed her reference to the need for a “smooth and orderly” Brexit in an earlier speech at Lancaster House in January made clear that this was what she had in mind.
The PM also still sees a post-Brexit transition period lasting “around two years”, potentially putting her at odds with the European Commission, which agreed on Wednesday it should finish at the end of 2020.
The 21-month transition would align the UK’s final departure with the end of the EU’s seven-year budget, to which Britain contributes.
Pressed by SNP MP Angus MacNeil on whether she had been forced to “beg” for a transition period, Mrs May told the Commons Liaison Committee: “I haven’t begged the European Union for two more years.
“This is not two more years to negotiate with the EU. This is two years when practically both businesses and governments will be able to put in place the changes necessary to move from the current relationship to the future partnership we will have.”
EU chief negotiator Michel Barnier said talks on the transition will begin in earnest after a January 29 meeting at which the 27 remaining members are expected to approve negotiating guidelines agreed by the Commission in Brussels.
Theresa May appears before the Liaison Committee in the House of Commons (PA)
The guidelines make clear the Commission expects the UK to continue to observe EU rules and regulations during the transition while having no say over them.
Arrangements could be made for the UK to be “consulted” on the allocation of annual fish quotas under the Common Fisheries Policy but Britain will not take part in the decision-making process, Mr Barnier said.
He appeared to indicate Spain would have a veto on any transitional arrangements covering Gibraltar, saying decisions on the issue would be “made for the 27, unanimously, by consensus”.
Mrs May told Prime Minister’s Questions in the House of Commons: “We are not going to exclude Gibraltar from our negotiations from either the implementation period or the future agreement.”
Later at the committee, Mrs May also claimed Britain can complete negotiating a free trade deal with the EU before Brexit day, expected on March 29 2019.
Her comments came after Mr Barnier indicated he was working towards reaching simply a political agreement on the future UK/EU relationship by October 2018, which would fall some way short of a full free trade agreement.
However, the PM said the UK was in a unique position to do a quick deal as a current EU member with trade arrangements already in line with Brussels.
“That is what we are working to and that is what I believe we can do,” she said.
“As you will know full well, we can’t legally sign the new trade agreement with the European Union until we’re a third country, until we’re out of the European Union – March 29 2019 – but I believe we can negotiate that arrangement in that time.”
Mr Barnier warned that “logically speaking”, when the UK leaves the EU, it will no longer be covered by around 750 international agreements – including dozens of free trade deals – negotiated by the EU while it was a member.
Responding to Mr Barnier’s suggestion that the kind of free trade agreement likely to be on offer to the UK will not include financial services, Mrs May said it was a matter for negotiation.
“I think, as we come into discussions, there will be a greater recognition of the role the City plays in financial provisions for Europe as a whole, not just the UK,” she told the committee.
Mrs May refused to confirm if MPs would get a “meaningful” vote to approve an exit deal despite rebel Tories joining the opposition to defeat the Government on the issue last week and write it into law.