Transition period length – two years or "whenever"?

Jacqui Bickerton considers the transition period dispute between the UK and EU and the imminent meeting of the Brexit committee at Chequers.

Jacqui Bickerton considers the transition period dispute between the UK and European Union and the imminent meeting of the Government's Brexit committee at Chequers.

Yesterday saw the publication of the UK's Government's proposals for the transition period immediately post Brexit, and in particular the length of the transition. The UK Government's position appears somewhat different now to its initial suggestion that transition should last "around two years". The announcement yesterday recommended that the transition should be as long as it takes to "prepare and implement the new processes and new systems".

During the transition period, the intended effect for the UK is that it will remain a member of the single market and customs union. The UK will remain under the European Court of Justice's jurisdiction but will not be granted any 'seat around the table', meaning that it has no voice to contribute or veto EU laws. This begs the question as to whether it would have been more sensible to seek instead an extension of the Article 50 exit period.

Further, it is reported that the UK Government is content to abide by new EU laws created during the transition and to refrain from signing any trade deals without the EU's permission, notwithstanding the recent letter from 62 Conservative MPs this week to the Prime Minister, Theresa May, urging against any restrictions on trade deal negotiation beyond the point of Brexit.

Unfortunately, the lack of agreement between the UK and the EU on the duration of transition persists, with the EU firm that the transition phase should end on 31 December 2020. This is not a date randomly selected, but instead the end of the EU's budget period, a date up to which the UK's monetary liability to the EU is calculated.

The UK Government's announcement has met with backlash from both sides of the Chamber, with Mr Corbyn emphasing that "…businesses need to know. People want to know. Even Tory backbenchers are demanding to know…" about the UK's future post Brexit.

Today, the Brexit sub-committee begins talks within the confines of Chequers, in an attempt to thrash out realistic proposals for the future of the UK's trade, citizens' rights and the Irish border.

Whilst any agreement reached at Chequers cannot possibly please all, as almost 12 months have elapsed since the triggering of Article 50, many in business, including those working in insurance and the financial sector generally, would consider it reasonable to expect immediate clarification not only of the transition period but, significantly, of the manner in which they will be regulated post Brexit and post transition.

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