Wednesday

25th Apr 2018

UK finance minister wants transitional Brexit deal

  • Hammond argues for "soft Brexit" to protect business (Photo: council of European Union)

British finance minister Philip Hammond came out in support of a transitional Brexit deal on Monday (13 December), arguing that disruption would hurt British business and could risk the country’s “financial stability”.

He argued that "thoughtful politicians" were supportive of a transition period, hinting at the differences within prime minister Theresa May's cabinet over the strategy of leaving the EU.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

“There is, I think, an emerging view among businesses, among regulators, among thoughtful politicians, as well as a universal view among civil servants on both sides of the English channel that having a longer period to manage the adjustment between where we are now as full members of the EU and where we get to in the future as a result of negotiations would be generally helpful,” he told a Treasury committee hearing.

Hammond hinted that the two years set aside for the exit procedure is not enough to finalise a deal and argued for transitional deals to kick in after the two-year period ended.

May is expected to launch the Article 50 exit procedure in March.

EU chief negotiator Michel Barnier last week said the terms of exit would have to be finalised by October 2018 for ratification to be completed in the time set out in the Lisbon treaty.

May also said last month – trying to calm businesses' fears over uncertainty and a possible sudden shock in case there is no deal – that she understood those concerns and would address them in Brexit negotiations.

Hammond said on Monday it would also be in the interest of the 27 remaining EU nations to reach a transitional deal with Britain.

"Collectively, I think transitional arrangements would be beneficial to us," he said.

The EU's Barnier did not rule out a transition deal, but said first the UK needed to decide and outline what kind of relationship it wants with the EU.

Hammond also reiterated his view to MPs that possible controls on migration from EU countries should not cut off the supply of skilled workers needed by British firms.

"I can't conceive of any circumstance in which we would use that system to choke off the supply of highly skilled, highly paid workers," he said.

The chancellor also warned that the Brexit deal could mean a fivefold rise in border inspections if the UK leaves the single market, which would mean investment in IT systems and hiring staff.

"It could certainly add hundreds of millions of pounds to the operation of the customs service," he told MPs.

Brexit minister David Davis however "is not interested" in a transitional deal to protect Britain from the effects of Brexit and that he would consider it only in order to “be kind” to the EU, the Financial Times reported earlier, hinting at disagreements within May's cabinet.

Message from the 27

The 27 EU leaders will hold a discussion without Theresa May this Thursday, when all leaders of the bloc will meet in Brussels.

According to Reuters, the 27 will reiterate the need for the UK to trigger exit talks as soon as possible, and that the EU would not start negotiations before.

The 27 will eventually have to agree on the guidelines for negotiations and give a mandate to the EU Commission to conduct the talks.

EU states to keep control of Brexit talks

Leaders to keep tight control of Commission in Brexit talks, with the UK locked out of the EU's internal kitchen, according to a draft accord seen by EUobserver.

Column / Brexit Briefing

Warm words in London, isolation in Brussels

British PM Theresa May found herself in not so splendid isolation at Thursday's EU summit, where Brexit garnered 20 minutes of time from EU leaders, suggesting Britain is fast approaching European political sidelines.

Feature

Spain makes bid for EU naval HQ

Spanish special forces seized a boat from African 'pirates' as diplomats watched on Monday, in a drill marking Spain's bid to grab a top EU military mission from the UK.

News in Brief

  1. UN expects over $4bn in pledges for Syria
  2. Commission wants more public data made available for reuse
  3. Study: Brexit will hit all European farmers
  4. European media face rise in 'verbal violence' from politicians
  5. Greenland PM to keep power despite poll slump
  6. Commissioner optimistic on FYROM name solution
  7. Italian court keeps NGO migrant rescue boat docked
  8. German Jews warned not to wear skullcap in public

Stakeholders' Highlights

  1. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May
  2. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  3. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  4. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  5. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  6. Mission of China to the EUProgress on China-EU Cooperation
  7. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  8. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  9. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  10. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  11. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  12. UNICEFCalls for the Protection of Children in the Gaza Strip

Latest News

  1. EU should not play 'games' with military HQs, ex-forces chief says
  2. EU had a plan for Jordan - now it's time to make it work
  3. Time for EU to take charge of global health research agenda
  4. EU in race to set global Artificial Intelligence ethics standards
  5. Juncker delays air quality action due to busy agenda
  6. Spain makes bid for EU naval HQ
  7. How Russian propaganda depicts Europe - should we worry?
  8. MEPs tell Chinese ambassador of concerns on trade