December 16, 2017
Brexit: UK will retain EU rules during transition, says Hammond

A leading Tory Brexiter has accused the chancellor, Philip Hammond, of trying to appease the EU by saying a transition deal would “replicate the status quo” and retain the same rules that apply within the single market and customs union when Britain leaves the bloc.
David Jones, a former Brexit minister and board member of the Leave Means Leave campaign, said: “It’s quite clear the chancellor has had no prior discussion with his cabinet colleagues before showing his readiness to appease Brussels. I can only hope that the prime minister will once again overrule her chancellor and make clear that Brussels’s demands are anathema to the UK.”
Hammond’s comments have infuriated Conservative hardliners. The party’s former leader Iain Duncan Smith accused him of undermining Theresa May, and Jacob Rees-Mogg said the UK would be reduced to the status of a colony if it failed to reject the EU’s guidelines for the deal.
Hammond, who is in China on a trade mission, was asked whether British firms should expect a transition deal under which the UK was still participating in the single market, customs union and subject to the European court of justice (ECJ).
“In a word, yes,” he told Sky News. “What they should expect as a result of the agreement we’ve reached this week with the European Union is a transition, or implementation period, which will start at the end of March 2019, during which we will no longer be members of the European Union.
“We won’t technically or legally be in the customs union or in the single market, but we’re committed, as a result of the agreement we’ve made this week, to creating an environment which will effectively replicate the current status quo so that businesses can carry on trading with their commercial partners across the EU as they do now, borders will operate as they do now, and financial services businesses will be able to carry on conducting their business across borders as they do now.”
Jones said: “What is it about negotiating that Philip Hammond doesn’t understand? Once again, the chancellor appears only too ready to do Brussels’s bidding and happily rule out a proper Brexit deal,” he said.
“Meekly agreeing to the EU’s demands that we are subject to their rules and the jurisdiction of the European court of justice for two years is completely unacceptable. It points a dagger at the heart of Brexit and at the will of the British people expressed in the referendum.”
The Brexit cabinet sub-committee meets on Monday ahead of a full cabinet meeting on Tuesday, and Jones urged Boris Johnson and Michael Gove to “rein in the chancellor and get him to abandon his bid to derail Brexit once and for all”.
Duncan Smith said: “The prime minister made it clear in the House of Commons on Monday that the purpose of the implementation period is to implement progressively what has been agreed. The chancellor’s comments today are not government policy, which he should stick to. As it is, he is undermining the prime minister’s negotiations with the EU.”
The EU’s guidelines for the next phase of Brexit talks were set out in Brussels on Friday after leaders of the 27 other members of the bloc agreed to move on to negotiating a transition period and future trade deal. The four-page document includes the process for agreeing the terms of the transition period, which is expected to last two years after Britain’s departure.
It makes clear that the EU expects the UK to observe all of its rules, including on freedom of movement, and accept the jurisdiction of the ECJ during this time.
Hammond’s comments came after Rees-Mogg said May must not agree to the conditions.
“We cannot be a colony of the European Union for two years from 2019 to 2021, accepting new laws that are made without any say-so of the British people, parliament or government,” he told BBC’s Newsnight. “That is not leaving the European Union, that is being a vassal state of the European Union, and I would be very surprised if that were government policy.”
The transition rules set up a potential problem for London because having to “continue to comply with EU trade policy” bars individual states from making deals with countries outside the EU, as the UK hopes to do.
May is also facing a growing rebellion over the government’s attempt to enshrine the date of Britain’s from the EU in law. To avoid a second Commons defeat, the prime minister will support an amendment to the EU withdrawal bill that will leave the Brexit deadline of 29 March 2019 in place but gives MPs the power to push it back if the EU27 agree.
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