UK could miss two-year Brexit deadline, warns Chancellor

The UK’s future relationship with the European Union may not be fully determined by the deadline set for Brexit, according to the Chancellor of the Exchequer.

Speaking to MPs at the Treasury Select Committee, Philip Hammond said it was the “emerging view” of companies, regulators and some politicians that the Government’s two-year timeframe after triggering Article 50 might not be long enough to achieve a “clear and firm end state”.

To prevent a sudden change in trade arrangements that could lead to financial instability both for the UK and the EU, the Chancellor suggested the creation of a transitional deal.

According to Sky News, he commented: “Having a longer period to manage the adjustment between where we are now as full members of the European Union and where we get to in the future as a result of the negotiations that we will be conducting would be generally helpful, would tend towards a smoother transition and would run less risks of disruption.”

Mr Hammond’s warning follows news of a leaked government memo suggesting David Davis, newly appointed Brexit Secretary, is “not really interested” in forming a transitory deal.

The leaked document does not however “properly reflect” either Mr Davis’ views or government policy, according to a Department for Exiting the EU spokesperson.

The Chancellor’s suggestion of a transitional deal is “encouraging”, said Labour MP Stephen Kinnock, who supports the Open Britain group calling for a ‘soft Brexi’ deal.

He continued: “There is a growing consensus that agreeing a new trading relationship between Britain and Europe may take much longer than the two years specified by Article 50.

“Not signing a transitional arrangement would mean punishing tariffs which would hit British businesses and raise prices in the shops.”

Article 50 is the formal process for the UK’s withdrawal from the EU and is due to be triggered in March next year, kicking off a two-year countdown for the UK to negotiate its trading arrangement with the bloc.

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