Speed up Brexit transition talks or deal will become a wasting asset, says UK Chancellor

Also tells EU leaders to talk to us ‘like friends’

In his speech at the cross-party Treasury select committee today, the UK Chancellor Philip Hammond underlined the ‘need for speed’ as he called for a rapid response from the EU27 to the prime minister’s offer of a transition deal.

Prime Minister Theresa May had stated in her Florence speech that the UK would be willing to make financial contributions and accepting existing EU rules for a transitional period of “around two years”, during which time Britain would operate under the same rules as it currently does to provide certainty for businesses while allowing new arrangements to be put in place.

The Chancellor also warned that it is possible that there could be no air traffic between the UK and the EU if Britain leaves without a deal: “It is theoretically conceivable that in a no deal scenario there will be no air traffic moving between the UK and the European Union on the 29 March 2019. But I don’t think anybody seriously believes that that is where we will get to,” he said.

Appearing before MPs today, the Chancellor went on to say that business wanted clarity that a transitional deal would be in place soon, describing it as a ‘wasting asset’ which will be less valuable the longer it takes to agree.

“It’s self-evident to me that a transitional arrangement is a wasting asset. It has a value today; it will still have a very high value at Christmas, perhaps early in the new year, but as we move through 2018, its value to everybody will diminish significantly, and I think our European partners need to think very carefully about the need for speed,” Hammond said.

Expressing a high possibility of the deal taking place, Hammond added: “In my discussion with counterparts across the EU, I find a high degree of consensus that it’s a sensible thing to do, that it’s a practical thing to do.” But he also clarified that securing the deal upfront would mean departing from the negotiations initially set out by the European commission.

The Chancellor also stressed on the need of European partners to engage and “start talking to us because we are friends.”

“We do expect a response from our EU partners. We have set out a fair and generous proposal to the EU. We don’t want them to immediately stand up and say, we agree to everything you’re proposing. We simply want them to say, yes, let’s sit round the table, and let’s look at the issues we will need to debate in order to get to a future partnership arrangement, via a transitional or interim period,” he said.

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