- Free movement of labour from the EU could last for up to four years after Brexit. Pressure from business forces Theresa May’s Cabinet to accept a lengthy transition to avoid a “cliff edge”. Brexit negotiations continue to stall over the rights of EU citizens in the UK. Big disagreements remain over rights and the jurisdiction European courts.
LONDON – The free movement of people from the EU could extend for up to four years after Brexit, after Theresa May’s government came around to the idea of a lengthy Brexit transition period.
According to multiple reports, senior Brexit campaigners in May’s Cabinet have agreed that current immigration rules allowing EU citizens to come and freely live and work in the UK could remain for years after Brexit in order to prevent a “cliff edge” for business when Britain leaves in 2019.
The International Trade Secretary Liam Fox and the Environment Secretary Michael Gove had previously insisted that any transitional period must be limited, with Fox insisting it could last just months. However, both have now accepted that it could extend for years affter Britain leaves.
One senior Cabinet source told the Guardian that the transitional period could last between two and four years, with three years being the most likely period.
The International Trade Secretary told the BBC that he now accepted the principle of a lengthy transition, saying that “another two years, say, wouldn’t be too much to ask.”
Business pressure May for a Soft Brexit
The development follows pressure from the business community. On Thursday, May held her first meeting of her new Business Council with senior business and trade organisations.
May was pressured to accept a lenghty transitional phase, with Carolyn Fairbairn of the CBI insisting it should last “as long as possible,” according to the Financial Times.
May was also urged to back away from her insistence that Britain could leave without a deal. “Everyone was agreed that: “nobody wants ‘no deal’,” the paper reports.
The meeting was the first time that May has had such direct meetings with chief executives since becoming prime minister.
The prime minister was deliberately shielded from one-to-ones with business leaders by her former chiefs of staff, Nick Timothy and Fiona Hill, as part of an attempt to make the Conservatives the party of the working class, according to the FT
Following the meeting, Goldman Sachs Chief Executive Richard Gnodde told the BBC that a transitional agreement must be agreed as soon as possible.
Gnodde said he was spending money “every single day” on Brexit contingency plans that could be avoided if an early agreement was made.
“If I knew today that we would have a significant transition period I could stop spending that (contingency) money because I know I would have time to transition my business,” he said.
“If they [the government] tell me in February 2019 there will be a transition period – well, I’ve already spent all that money, it’s not much use to me. At that point the transition period doesn’t really help – so the sooner we know… that’s obviously helpful to us.”
The pressure appears to have caused a shift in government thinking towards a softer form of Brexit. Business Minister Lord Prior reportedly privately told a meeting of insurance industry figures that the UK is heading for the “softest of soft Brexits”.
EU citizens row
The new cabinet concession comes as Brexit negotiations continue to falter over the future of EU citizens living in the UK.
Yesterday the UK and EU released a joint paper outlining the current status of talks on the issue. The paper revealed widespread disagreement on everything from the jurisdiction of European courts to criminal record checks on EU citizens in the UK.
The two parties also disagree on whether Britain should continue to have access to the European Health Insurance Card after Brexit and whether UK citizens living in the EU after Brexit should be allowed to continue to live and work freely across the EU.