UK to propose extension to Brexit transition period until 2023 - report
By Caoimhe Toman
Date: Thursday 24 May 2018
(Sharecast News) - Theresa May is set to ask the European Union for an extension of the Brexit transition period until 2023, according to reports.
The Prime Minister is thought to be preparing to make the request in order to avoid the hard border in Ireland and give businesses enough time to adapt, even though the plan faces criticism from Tory Brexiteers who prefer the 'max-fac' divorce scheme.
Downing Street has not made a formal proposal yet, The Times reported, with opposition expected from the EU and UK Brexit-supporters within the government. A government source denied the report, telling Reuters on Thursday morning that both Britain and the EU were "absolutely clear" on the transition period ending in December 2020.
Business Secretary Greg Clark also admitted to BBC that Britain is considering the extension to save British jobs which are at the front of the government's priorities: "It wouldn't be a question of extending the transition. It would be, as it were, implementing as soon as you can do: there will be different parts that can be done immediately. There will be things that will take more time."
Brexiter backbencher Jacob Rees-Mogg dismissed the option as "Project Fear" and said the clean break from the EU would have no impact on productivity: "This Project Fear has been so thoroughly discredited that you would have thought it would have come to an end by now. We trade successfully all over the world. The delays on goods coming into Southampton are tiny.
"We will have control of goods coming into this country; we will set our own laws, our own policies, our own regulations, and, therefore, we will determine how efficient the border is coming into us," he added.
According to the head of HMRC the maximum facilitation or max-fac option preferred by Rees-Mogg and other Brexiters, could result in a £20bn hit a year for UK businesses.
The model relies on technology and trader schemes that reduce border checks but it will be more expensive than remaining aligned with the EU which would be almost cost-free.
Head of HMRC Jon Thompson told MPs on Wednesday the max-fac option would force companies to pay customs declarations at £32.50 a time and also similar charges on the EU side of the border.
"So you need to think about the highly streamlined customs arrangement costing businesses somewhere in the late teens of billions of pounds, somewhere between £17bn and £20bn. The primary driver here is the fact that there are customs declarations," he said.
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