Brexit

Britain and north face cliff-edge Brexit without trade deal, Theresa May is warned

Business leaders have called for a Brexit transition deal to be agreed "as soon as possible". Picture by Daniel Leal-Olivas, Press Association
Gavin Cordon, Shaun Connolly and David Hughes, Press Association

PRO-EU MPs have expressed alarm the UK could leave the European Union without any transition period if there is no deal on a new free trade agreement.

In the Commons, Theresa May said in order to have a transition to a new partnership arrangement with the EU following Brexit, the terms of that arrangement would have to be clear.

Following last week's EU summit in Brussels, the Prime Minister said she remained "confident" she would be able to get that "new, deep and special partnership" with the EU.

However Labour MPs said if she failed to get an agreement and there was no transition, businesses would face the "cliff-edge" break which they had long feared when the UK leaves in March 2019.

Mrs May told the House: "The point of the implementation period is to put in place the practical changes necessary to move to the future partnership.

"In order to have that you need to know what the future partnership is going to be."

The Prime Minister was pressed by Labour former Cabinet minister Yvette Cooper who warned the UK could be forced to fall back on World Trade Organisation rules.

"If we haven't got a long-term trade deal agreed by this time next year, then there won't be any transition deal at all and Britain will end up on WTO rules by March 2019," she said.

Former shadow chancellor Chris Leslie also urged her to commit to negotiating a transitional arrangement separate from a trade deal.

"It is the cliff edge that the business community want to know will not be there in 2019," he said.

He later tweeted that her refusal to offer the reassurance he was demanding would be a "disaster" for business planning.

Following her statement Liberal Democrat leader Sir Vince Cable said she should act to lift the "shadow of uncertainty" hanging over business.

"This defeats the whole point of a transition deal, which is to provide much-needed certainty," he said.

"Past experience shows there is no way a final trade deal with the EU will be agreed by March 2019.

"Firms facing crucial investment decisions need clarity now, not in another 18 months' time."

The row came after a leak of a draft letter intended for Brexit Secretary David Davis from five leading business lobby groups emphasised the need for transitional arrangements to be agreed "as soon as possible".

The private letter, signed by the CBI, British Chambers of Commerce, manufacturing trade body EEF, the Institute of Directors and the Federation of Small Businesses, said firms were facing serious decisions which with "consequences for jobs and investment in the UK".

Consultancy firm Deloitte also said the north's economy could be "particularly exposed" to Brexit uncertainties in the year ahead.

Downing Street said the details of the transition, or "implementation period", would have to be discussed alongside the final trade deal.

"The implementation period is a bridge to where we are headed in terms of the future relationship with the EU," the Prime Minister's official spokesman said.

"Of course you need to know what that future relationship looks like in terms of the implementation period."

In the Commons, Mrs May told MPs: "I am ambitious and positive about Britain's future and these negotiations."

However Labour leader Jeremy Corbyn dismissed her statement as "Groundhog Day", saying the impasse in the Brexit negotiations remained, partly because of divisions within the Cabinet and her own party.

"The Prime Minister is too weak to do anything about it," he said.

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