Philip Hammond’s preference for a transitional period after the UK leaves the EU could refer solely to a period of adjustment for customs and border staff, rather than retaining any trading or free movement rights, a former cabinet minister has said.

Eurosceptic Conservative MP Peter Lilley, who sits on the Exiting the European Union committee, said he would expect a transitional period of “weeks or months” rather than years to allow staff to prepare for a new system.

“If by the transitional deal the chancellor means a period of implementation of different processes that would be absolutely normal in any new arrangements,” he told BBC Radio 4’s Today programme.

“If there’s any suggestion that we have a temporary agreement followed by a permanent agreement, then that can’t be what the chancellor was saying because it would take as long to negotiate a temporary agreement as it would a permanent agreement.”

The chancellor gave the first major indication on Monday that the Treasury believes it is likely to take longer than two years to negotiate a new relationship with the EU.

“There is, I think, an emerging view among businesses, among regulators, among thoughtful politicians, as well as a universal view among civil servants on both sides of the English channel that having a longer period to manage the adjustment between where we are now as full members of the EU and where we get to in the future as a result of negotiations would be generally helpful,” he told the Treasury select committee.

However, last week a memo leaked to the Financial Times suggested that the Brexit secretary, David Davis, had told a private meeting with City leaders that he was not really interested in a transitional deal.



Lilley said that any transitional deal that kept tariff-free access to the European market for the UK should be a permanent one. “We will either get an agreement that continues tariff-free trade, in which case we’d have zero tariffs to zero tariffs, and you don’t need a transitional deal,” he said.

“Or we fail to get an agreement and we trade on World Trade Organisation terms, which some people may think is not as good. If we can get the same deal as we have now for two years we can negotiate it permanently and that would be the ideal.



“We know the EU has over 50 free trade agreements with countries without free movement of people. There’s no reason why we shouldn’t be an additional country.”

Anna Soubry, the former business minister, said a transitional period, even if it meant keeping EU rules on free movement and paying into the EU budget, was “common sense” while a permanent new relationship was negotiated. “It’s certainly the view of businesses I’ve been speaking to and their trade bodies,” she said. “They see the real benefits of this period where we smoothly get a new arrangement.

“We will leave the EU by 2019 and would enter this transitional period which should smooth the process as we negotiate a new deal,” she said. Asked whether any transitional period would be likely to be more than two years post-2019, she said: “I’m not saying how long that period should be, it should be as long as business needs.

“We will get there but it won’t be this dreadful idea of dropping off the cliff edge. That is the alternative. We leave the EU and there is nothing, we jump straight into World Trade Organisation tariffs and that will be very hard for our businesses.”



Former Ukip leader Nigel Farage said talk of a transitional deal was “more backsliding” from the government. “Half-Brexit is where they’re going,” he said. “I think they’re going to fudge and give us a Norwegian-type deal.”

Tim Farron, the Liberal Democrat leader, said the comments were an example of confusion in the government. “One day David Davis says there is no need for a transitional deal, the next the chancellor is backing one,” he said.

“These mixed messages are a sign of the confusion and division at the heart of this Conservative Brexit government.”