Brexit transition agreement 'urgent', MPs warn government

MPs on parliament's Treasury Committee have warned the government that an agreement to implement a post-Brexit transition deal must be completed in a matter of weeks, or the UK economy will begin to be adversely affected.

The parliamentary committee published its report into transitional arrangements between the UK and EU on Thursday, referring to the issue as “urgent” after last week’s breakthrough on the three core issues surrounding Brexit.

Theresa May’s government agreed a deal last week with EU negotiators which is expected to advance Brexit talks to phase two, dealing with trade issues.

According to the committee, businesses will soon begin implementing contingency plans for a ‘no-deal’ Brexit if such a transition agreement is not finalised.

“The Treasury Committee, a cross-party group consisting of Members with a wide range of views on Brexit, is unanimous in its view that an agreement between the UK and EU27 on ‘standstill’ transitional arrangements is now urgent,” said Treasury Committee chair Nicky Morgan.

“The consequences of failing to reach an agreement are dramatic and damaging. Many businesses will begin to prepare for a ‘no deal’ outcome – moving jobs and activity, and incurring potentially unnecessary expenditure – early next year.”

'ADAPTATION PERIOD'

The committee’s report also suggested that certain sectors would have to make use of an ‘adaptation period’ after a transitional period before the full effect of Brexit come into force.

It added that the government should be prepared to accept other EU rules outside of access to the single market and customs union during the period.

“Speed is of the essence. Delays to agreements caused by arguments over arcane points of principle could damage the economy. The Government should be prepared to accept the terms on which transition is offered by the EU27,” Morgan added.

“This may well include accepting EU rules beyond those of the Single Market and Customs Union; and it is likely to involve retaining, on a temporary basis, the jurisdiction of the ECJ, and the direct effect and supremacy of EU law. “

Such a resolution could anger the more hardline Brexit supporters within May’s government and the wider Conservative party, with some Brexiteers rejecting any further influence from the European Court of Justice after March 2019.