Government will seek 'status quo' transition deal, Philip Hammond says

Posted On: 
13th September 2017

The UK could remain in the single market and the customs union during the Brexit transition period, Philip Hammond has suggested. 

Chancellor Philip Hammond
PA Images

The Chancellor said there was a "general agreement" in Cabinet that "it would not make sense to ask business to face two sets of changes” - once in March 2019, and another at the end of a transition period.

Speaking to a House of Lords committee, Mr Hammond added: “That implies a transition, or interim, period would need to look a lot like the status quo, otherwise businesses will be making one set of changes at the beginning of the interim period and another set towards the end of it.”

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He said the "ideal solution" from the Government's point of view would be "that the trade in goods and services would be able to continue as it does now".

His remarks echo those of Brexit Secretary David Davis, who said last week that he wanted the transitional period to be "as close as possible to the current circumstance". 

It means the Conservatives' position now looks much like that set out by Labour's Keir Starmer, who has backed continued membership of the single market and EU customs union during any transition period.

It comes as the Government has announced that the next round of Brexit negotiations will be delayed by a week so that Theresa May can make a major speech setting out her vision for Brexit. 

The talks that had been set to start on 18 September will now kick off on 25 September.

Last week Guy Verhofstadt, the European Parliament's top negotiator, predicted the talks would be postponed by an "important intervention" by Theresa May.

It is understood he was referring to a major Brexit speech the Prime Minister will make on or around 21 September.

A Government source told PoliticsHome the delay would allow both sides more time to prepare for the next round of negotiations and was "not incompatible" with Mrs May's desire to "intensify" the discussions.

"It also allows Michel Barnier to do more talking with the 27 other member states and come back with a more flexible approach," the source said.