- Chancellor Philip Hammond has said that the Brexit transition deal with “look a lot like the status quo.”
- Speaking to a House of Lords committee Hammond said the government would not ask businesses to make two sets of changes after Brexit.
- The chancellor also admitted Dover could face “significant disruption” in a no-deal scenario.
LONDON — Chancellor Philip Hammond has said that the UK will try and get a Brexit transition deal that “looks a lot like the status quo,” which would mean staying in some kind of customs union and single market with the EU.
Speaking at the House of Lords economic affairs committee, the chancellor said: “Otherwise businesses will be making one set of changes at the beginning of the interim period and another set towards the end of it.”
His comments follow the government confirming that the next round of Brexit negotiations had been delayed until September 25 after previously being scheduled for next week. It is expected that Prime Minister Theresa May will make an “important intervention,” laying out her plans for a phased withdrawal from the EU prior to the negotiations.
Hammond said there was “general agreement that it would not make sense to ask business to face two sets of changes,” once in March 2019 and secondly once a new trade deal had been agreed between the UK and EU.
He said: “That implies a transition or interim period would need to look a lot like the status quo, otherwise businesses will be making one set of changes at the beginning of the interim period and another set towards the end of it.”
This suggests that the government is looking to try and stay within an arrangement during the transition period that is almost identical to the one the UK has with the EU currently, despite legally leaving the single market and customs union.
Hammond’s comments brings him in to line with Labour’s policy of backing staying in the single market and customs union after Brexit, which might continue once negotiations over a trade deal are completed.
Dover could face “significant disruption”
The chancellor also warned that Dover would not be ready for new customs checks immediately after Brexit. When asked whether the capacity of British ports was adequate for a no-deal scenario, he said: “No, it is clearly not.”
Hammond told the committee: “Anyone who has visited Dover will know that Dover operates as a flow-through port and the volumes of trade at Dover could not be accommodated if goods had to be held for inspection. I suspect even if they were only held for minutes, it would impede the operation of the ports.
“Roll-on, roll-off traffic at Dover is predicated on trucks rolling off a ferry immediately, out of the port and the ferry reloading and departing pretty rapidly . . . anything that caused delay in vehicles exiting the port would cause significant disruption to patterns of movement.”
He said that HMRC was making contingency plans in case the UK left the EU without a deal, but said it was a “challenging” task to prepare new border controls for March 2019.
Labour MP Wes Streeting, a leading supporter of the Open Britain campaign said: “He [Hammond] has made clear that leaving the Customs Union could cause significant disruption to our customs system, meaning chaos for our ports, exporters and businesses if a good transitional deal is not agreed.
“Businesses and international investors are beginning to lose confidence in the Government’s attitude to Brexit. Jobs and growth are on the line. It is vital that the ideological Brexiteers in the Cabinet wake up to reality and put membership of the Single Market and Customs Union back on the table.”
Liberal Democrat Brexit spokesperson Tom Brake commented: “This is a clear admission that despite all the rhetoric, the government is still woefully unprepared for a no deal Brexit… The only way to maintain the status quo is to stay in the single market and customs union.”
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