Brexit will take AT LEAST two years Philip Hammond warns, as he admits favouring a transitional EU deal
The Chancellor backed calls for an interim arrangement, just days after Brexit Secretary, David Davis, said he "wasn't really interested"
THE CHANCELLOR sparked a fresh Cabinet rift by calling for a “transitional” post-Brexit deal to ease the pain and uncertainty for British business.
In comments that will infuriate arch-Eurosceptics the Chancellor told MPs that rushing the negotiations or the country’s departure from the EU could even threaten Britain’s financial stability.
And in a thinly-veiled dig at Brexit Secretary David Davis and Trade Secretary Liam Fox he said “thoughtful politicians” were of the same opinion.
At the end of last week, Mr Davis said he wasn’t interested in a transitional deal despite critics claiming it could leave British business facing a ‘cliff-edge’.
The claims came as Mr Hammond was grilled by MPs on the cross-party Treasury Select Commons Committee. They raise the prospect Brexit will take much longer than the hoped-for two years.
Mr Hammond said there was an “emerging view” among business, regulators, civil servants and politicians that “having a longer period” to manage Brexit would “be generally helpful”.
He said a transitional deal could take the form of a “period of adjustment” after the terms of Brexit are settled which “introduce the changes in a series of steps”.
Or it could be that a transitional agreement is put in place to allow more discussion about the actual Brexit package - “to give us a little more time to conclude what the end state should be”.
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Mr Hammond insisted that such an arrangement would have to be mutually beneficial and Britain would not push for it alone.
But the Tory – one of the more Europhile members of the Cabinet – added that people had to remember Brexit would also be a huge upheaval for the public sector.
He warned that leaving the Customs Union would require hundreds of millions to be spent hiring extra border staff and upgrading IT at ports to check EU imports.
“I think the further we go into this, the more likely it is we will conclude we need a longer period to deliver,” he said.
Arch Eurosceptic Steve Baker said he would have no problem with a tranisition agreement if the Brexit deal saw the country take back control of borders, money and laws.
He said: “If our withdrawal meets the tests set out by the PM, there will be no problem.”
But jubilant pro-EU campaigners Open Britain said the Chancellor had recognised the threats facing UK PLC.
Labour’s Stephen Kinnock said: “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 agreement would mean punishing tariffs which would hit British businesses and raise prices in the shops.”
Labour's Keir Starmer will warn that the fight against a "hard Brexit" is "the battle of our times."
Arguing for a soft Brexit instead, the Shadow EU Exit Secretary will warn that battle "will be fought out over the next few years."
Speaking at Bloomberg today Mr Starmer will warn Labour colleagues: "The Opposition needs to be in that battle. Labour needs to be in that battle.
“If we are not, the chance to shape the future of our country will be lost."
“Future generations will not forgive us for such a dereliction of duty.”
