Chancellor Philip Hammond says Brexit transition deal will ‘replicate the status quo’ between EU trade partners
He said the deal sought by the Government would mean the UK will keep the same rules for trade and immigration until 2021
CHANCELLOR Philip Hammond insisted today the UK’s business relationship with the EU would remain largely unchanged even after Brexit.
He said the deal sought by the Government would mean while the UK “technically” leaves the customs union and single market, it will keep the same rules for trade and immigration until 2021.
On Friday, the EU published a document which set out the process of agreeing the terms of transition, which made clear the UK will be expected to observe all of its rules during the two year period.
Mr Hammond, in China on a trade mission, was asked whether firms should expect a transition deal where the UK is still participating in the single market, customs union and subject to the ECJ.
"In a word, yes," he told Sky News.
He said after the implementation process, to start at the end of March 2019, the government will implement "the current status quo so businesses can carry on trading with their commercial partners across the EU."
However, the restrictions imposed by the EU's position were rejected by Tory Jacob Rees-Mogg, who said Mrs May must not agree to them.
"We cannot be a colony of the European Union for two years from 2019 to 2021, accepting new laws that are made without any say-so of the British people, Parliament or Government," he told BBC's Newsnight.
"That is not leaving the European Union, that is being a vassal state of the European Union, and I would be very surprised if that were Government policy."
The looming row over the terms of a transition deal comes after the Prime Minister Thereesa was given a boost after agreement within the Tory ranks means she looks set to avoid a second Commons defeat.
Behind-the-scenes efforts resulted in a compromise which is acceptable to would-be rebels who were set to reject Mrs May's plan to write March 29 2019 into law as the date of the UK's departure from the bloc.
The Government is understood to be "looking closely" at the amendment tabled by Tory MPs from both sides on the Brexit divide which would give ministers flexibility to change the departure day.