Prime Minister Theresa May is keeping Britain on track for a hard Brexit, but she wants the journey away from the European Union to be longer and smoother than initially planned.
After weeks of wrangling since her Conservative Party lost its parliamentary majority, May’s government still seems determined to leave the single market and customs union that give Britain free, frictionless trade with the bloc.
What’s changed is that, according to Chancellor of the Exchequer Philip Hammond, there’s now a consensus among senior ministers that even if the U.K. will departs the EU in March 2019, nothing should change the next day. Instead, the cabinet wants the status quo to run for two or three years.
We have to develop a plan that will deliver for the British people business as usual, life as normal, Hammond told the BBC on Friday.
A transition would be welcomed by businesses keen for time to adjust or put off being encumbered by tariffs and regulatory obstacles. Firms and banks will now hope they have the space to prepare.
Much of the language does echo what we have been saying in recent weeks, said Christopher Grummett, a spokesman for the Confederation of British Industry. We have been calling for the U.K. to have full access to the single market and a customs union until a final deal is in force.
May would also have longer to land a permanent trade deal with the EU, and her government would be better placed to work out the technical details of the divorce, such as establishing new customs practices and immigration rules.
Position Shift
Hammond’s plan reflects a public change in position from some of those who campaigned most ardently for Brexit. In just two weeks, Trade Secretary Liam Fox pivoted from saying he could accept a transition of a few months to acknowledging that it could run until 2022, the year of the next election. Environment Secretary Michael Gove also signed up to a stopgap.
The political question is who inside May’s government won.
Hammond’s predecessor as chancellor, George Osborne, greeted the news as a victory for those who want the U.K. to stay close to the EU.
Does Brexit mean Brexit? he tweeted. Gov position is as we predicted two months ago: no deal in 2019; no bespoke transition; EEA & customs union members.
Hammond even went as far as to open the door to European judges having a say over the implementation of any transitional deal something that has been taboo for the most ardent supporters of Brexit. He hinted at a tribunal along the lines of the one used by members of the European Economic Area.
Door Open
The chancellor’s comments also came the day after Home Secretary Amber Rudd, who also supported remaining in the EU, said there would be no sudden clampdown on migrants after Brexit.
Others argued Britain is still bound for a rupture with its top trading partner.
Hammond is now openly and repeatedly saying we will leave the single market and the customs union none of which he was saying a month ago, said Anand Menon, professor of European politics at King’s College London.
Liberal Democrat leader Vince Cable, who leads the most pro-EU of the mainstream parties, agreed: Hammond is simply proposing to delay the car crash by another two years. he said in a statement. An extreme Brexit in 2022 rather than in 2019 is still an extreme Brexit. He should be arguing in cabinet to protect our free trade with the world’s largest market.
The silence from euroskeptic Conservative lawmakers lends weight to the idea that they believe they’re winning. The advocates of Brexit have resisted a long transition period for fear that Britain’s departure would be permanently delayed.
Slowing Economy
When May set out her Brexit strategy in January she talked about industry-specific transition arrangements. That was before her election humiliation.
Mounting signs that the economy is slowing are adding pressure for her to compromise. The International Monetary Fund this week cut its forecast for growth this year and the economy grew just 0.3 percent last quarter.
And even if the government has reached a conclusion about what it wants, there’s no guarantee it will get it. The EU has said while a transition is possible and desirable the two sides must first agree on the long-term relationship.
Michel Barnier, the EU’s chief negotiator, complained this week about the slow progress of talks on topics such as citizens’ rights and the financial settlement he wants Britain to pay. That’s raising doubts about whether EU governments will allow trade talks to begin as soon as October as the U.K. hopes.
Accordingly, the EU was lukewarm about Hammond’s comments on Friday. EU spokesman Alexander Winterstein put it like this: Once you know where you are going you can also consider the modalities of getting there.