Brexit transition: Is cabinet fully on board?

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The chancellor wants to avoid choppy waters for businesses and disruption to trade

Slowly but surely, like a submarine emerging from murky waters, the government’s position on what happens immediately after Brexit is becoming clearer. And the speed of our withdrawal can now be measured, too.

Beneath the surface, Chancellor Philip Hammond had been arguing for a transitional arrangement to avoid choppy waters in 2019. There is no longer any dissent in the ranks – that concept has been agreed by the cabinet.

In return the chancellor has acceded to demands by ministers who voted to leave the EU that any transitional phase must be completed by the scheduled date of the next general election – June 2022.

But have other disagreements so far escaped the political sonar?

Mr Hammond privately believes a new trade deal with the EU simply can’t be struck by the time of Brexit, in March 2019. So he would be prepared to leave things much as they are for a time.

While technically the UK would leave the single market and customs union, initially at least extremely similar arrangements would be put in place while a final free trade deal was completed. Then there would be a period where the new arrangements would be phased in.

That is why he uses phrases such as “transitional phase” or “transitional period”. And on the record, he has said he wants to ensure things feel like “business as usual” to the British people, the day after the UK leaves.

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Technically freedom of movement ends in March 2019 but something similar could remain for a period

But others in cabinet, not least Brexit Secretary David Davis, are much more confident that the essentials of any new trading arrangements with the EU could be hammered out by 2019.

So all that’s needed isn’t so much a “transitional phase” of further negotiation but an “implementation period” that puts any new arrangements in place.

For example, everyone recognises that, outside of the customs union, new staff and IT systems would be required to deliver the new regime and that simply couldn’t be done the day after Brexit.

And there are further potential disagreements which could threaten the current esprit de corps – how long would the free movement of labour last after Brexit?

While, technically, free movement ends with EU membership, the government has already agreed there will be a “grace period” when EU citizens can still come to work here freely, so long as they register with the authorities.

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Mr Davis is more confident about clinching an early EU trade deal

A similar system operates in many EU countries now – and they call it “free movement”.

The chancellor and Home Secretary Amber Rudd stress that it will take time to better police our borders, and to wean some companies off any over-reliance on migrant labour.

So the exact length of the grace period may yet end up in a graceless political dispute.

Terms of future trade could also cause conflict. Mr Hammond signalled his willingness to put any new trading arrangements with other countries on hold until after the transition.

Frankly the EU would probably demand this but it’s hard to see Liam Fox, the international trade secretary, accept any ban on negotiating – rather than implementing – new deals until a transitional phase ends.

Then there is the thorny issue of which body supervises the trading rules between the UK and EU during a period of transition – would the European Court of Justice (ECJ) still have a role?

Mr Hammond has floated the idea of a tribunal, similar to the arrangements in place in European Economic Area countries such as Norway, to settle any disputes.

But if the EU insists on the ECJ, cabinet unity may yet fray. This might even torpedo any hope of a transitional arrangement that the British government could accept.

So while on the surface it may look like the course of HMS Brexit appears clearer, still waters run deep.

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