15/03/18

David Davis accepts that the Brexit transition will end in December 2020

(Business Insider) — Brexit Secretary David Davis has suggested that Britain will accept the European Union's demand that any transition deal must end no later than December 2020.

Prime Minister Theresa May has said she wants to negotiate a transition (or implementation) period lasting "around two years" which will take effect after Britain leaves the EU in March 2019.

In negotiating guidelines published last month, the UK government said it wanted the EU to consider extending the transition period indefinitely to allow Britain the time it needs to implement new structures and policies.

However, in an episode of Newsnight aired on Wednesday evening, Davis said he "would live" with the transition deal ending in December 2020.

"That is more important to me than a few months either way. So I'm not bothered too much about the question of whether it is Christmas 2020 or Easter 2021," the minister said.

"I would live with that. We are still in the middle of a negotiation. Frankly what I would not do is delay the decision [on an implementation period] in order to get a month or two more."

The EU side has said it wants any transitional arrangement with Britain to end in December 2019 as that would coincide with the bloc's financial calendar.

The EU's chief Brexit negotiator, Michel Barnier, told the UK's European Security Committee this week that the EU is not prepared to accept a transition deal which goes beyond the 20 months set out in its own guidelines, an MP on the committee told Business Insider.

UK and EU negotiators have until the European Council summit next week to reach an agreement on transition.

The two sides still need to reach an agreement on how to avoid a hard border on the island of Ireland and the rights of EU citizens who arrive in Britain during a transition period

A CBI survey published in November said that 60% of UK firms would activate contingency plans if the UK government fails to secure a transition agreement by March.

Otherwise, the issue will be pushed back to June, which would leave little over five months to negotiate the future relationship.