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Talks on future EU relationship must be concluded by Brexit date, says Davis

Brexit Secretary David Davis gives evidence on developments in European Union divorce talks to the Commons Exiting the EU Committee in Portcullis House, London PICTURE: PA

BREXIT Secretary David Davis has said that he wants "substantive" negotiations on Britain's future relationship with the EU to be concluded by the time it leaves the bloc in March 2019.

Giving evidence to the Commons Exiting the EU Committee, Mr Davis said it would be a mistake to allow negotiations to carry on into the proposed transition period following Brexit.

"It would be unwise to get sucked into a negotiation during the transition period itself which is substantive, major," he said.

"Why? Because the balance of power in the negotiation alters. The aim then on the part of the commission would be to spin out the negotiation."

Mr Davis said he expected a clash with the European Union over whether the UK will be able to seek its own trade deals during the transition period.

He insisted that the transition period was not a "deferral" of Brexit, even though the UK will follow Brussels' rules.

"Firstly we will not be members of the union, we will be replicating to a very large extent the operations of the single market and customs union in order to make sure there is a single change, from the point of view of businesses in particular," he said.

"We will not be subject to the duty of sincere cooperation, which is what stops us arriving at trade deals now, negotiating and signing trade deals now, so that freedom will exist."

"There may be an argument over the issue of doing outside negotiations, there may well be an argument over that."

The UK's approach, he added, was one that "visibly does no harm to the European Union" but "there are people within the union who want to restrict any advantage for us".

Mr Davis said he was "relaxed" about the transition period because his main concern was a deal on the future relationship.

"That is what matters, that is what people will think about and judge us on in 10, 20, 30 years' time," he told MPs on the Exiting the EU select committee.

The EU's Brexit negotiator Michel Barnier wants the transition period to end in December 2020, but Mr Davis said "it might be more sensible" for it to end in March 2021 when the "grace period" for EU citizens in the UK expires.

Mr Davis suggested the transition period could even last longer – up to 27 months.

"But bluntly it's not going to be a deal breaker one way or the other," he said.

"We will have an amicable conversation about it and we will come to a conclusion somewhere between 21 and 27 months I guess."

David Davis said "I suspect" the government will publish a paper setting out its approach to the financial services sector.

"We don't have an explicit plan to publish a financial services paper. But we may well do so," he said.

The Brexit secretary said the UK would not be in "lock step" with EU regulations on financial services after Brexit but would aim to maintain market access.

"The aim of this whole exercise will be to maintain maximum possible access to the European market whilst at the same time exercising overall freedom over what we are going to do in the future."

Mr Davis rejected a claim by Tory MP Jacob Rees-Mogg that Britain would be a "vassal state" during the transition as it would continue to pay into the EU budget and remain subject to the jurisdiction of the European Court of Justice.

"If that were going to be the case in perpetuity my answer would probably be 'yes', but the answer for a short time, 'no'," Mr Davis said.

However, Mr Rees-Mogg said the government's acceptance that there would a transition period, rather than the implementation period originally proposed by Theresa May in her 2017 Florence speech, marked a "big shift" in policy.

"Transition is different because transition means we are de facto inside the European Union for that period and we are only actually out at the end of the transition," he said.

"That is a big shift in government policy and a big move away from the vote in June 2016."

Mr Davis said: "We are going to see an implementation period as described pretty much in the prime minister's Florence speech. We will do so in a way which will leave us in 2021 free of all these fetters. No vassal state us."

The European Parliament's Brexit co-ordinator Guy Verhofstadt said a transition period would amount to "membership without representation" for the UK.

At a European parliamentary committee he said the negotiating guidelines for the transition period made clear it would involve "no change, no cherry picking".

The UK would no longer be represented at the European Parliament, European Commission or European Court of Justice during the period.

"It's the membership without representation that is mainly the transition.

"All policy stays intact, all legislation continues to apply, the oversight of the European Court of Justice continues but there will be no representation of the UK in the political bodies steering the European Union during this transition period."

European Parliament Brexit coordinator Guy Verhofstadt has previously warned that the UK would be a "dwarf" on the world stage outside the EU.

Explaining his comment he told MEPs: "In the future world all European countries are dwarfs, the only way to avoid it is to work together in the European Union – that's not my invention, it was Paul-Henri Spaak who said that.

"We are all dwarfs – some know it, some for the moment have not the knowledge to know it but they are going to know it fairly fast – I think that's the reality."

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