David Davis arrives in Brussels for the second round of Brexit negotiations today as the cabinet became divided over the details of a transitional deal with the European Union.
While Liam Fox has advocated a “very time-limited” transitional period, Philip Hammond, the chancellor, has used the hung parliament as an opportunity to press for extended temporary arrangements on customs, potentially lasting four years.
A transitional arrangement with Brussels could delay the process of withdrawal and may stop Britain from signing trade deals with non-EU countries — which could effectively render Dr Fox redundant as international trade secretary.
Dr Fox made clear yesterday that this option would not be acceptable. “I want, in a transitional period, to be able to negotiate agreements at that point,” he told Sunday Politics on BBC One. “What we can’t have is a putting-off of the point where we have freedom to negotiate our trade agreements.”
Asked whether Britain was free to sign free-trade agreements during a transitional period, Dr Fox replied: “No, that’s to be negotiated. I would think that’s one of the conditions we would want to set. It’s certainly something that I would want to see because otherwise it makes it much more difficult for us to take advantage of the opportunities that Brexit itself would produce.”
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Mr Hammond said yesterday that a transitional period was important “to restore business confidence and then consumer confidence” and to “avoid a hard landing”. Dr Fox said last week that a transitional period should last just “a few months”, but his comments were dismissed by Mr Hammond, who claimed that “we are going to be talking a couple of years”.
Lord O’Donnell, the former cabinet secretary and head of the civil service, has called on the government to “start being honest about the complexity of the challenge” posed by Brexit. He told The Observer: “There is no chance all the details will be hammered out in 20 months. We will need a long transition phase and the time needed does not diminish by pretending that this phase is just about ‘implementing’ agreed policies as they will not all be agreed.”
Sir Nigel Sheinwald, a former British ambassador to the EU, said that there was now a “one in three” chance of talks collapsing, while Jeremy Browne, the City of London’s special representative to the bloc, warned that France was pushing for the “hardest Brexit”.
In a memo to the Treasury, which was leaked to The Mail on Sunday, Mr Browne claimed that “France sees Britain and the City of London as adversaries, not partners”.
Mr Davis, the Brexit secretary, is expected to arrive in Brussels this morning for the second week of exit talks. He will tell Michel Barnier, the EU’s chief negotiator, and his team that Britain’s priority is securing a deal on citizens’ rights.
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Mr Davis urged both sides to “get down to business”.