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Chancellor: Transitional deal expected within three years of leaving EU

Philip Hammond said “many things will look similar” on the first day after leaving the bloc in March 2019.

A transitional deal is expected to be completed within three years of the UK leaving the European Union, according to the Chancellor.

Philip Hammond said trade deals with third countries may not come into force during the period, but claimed there was a “broad consensus” treaty-based arrangements with the EU would be in force by the next scheduled general election in June 2022.

Mr Hammond said “many things will look similar” on the first day after leaving the bloc in March 2019, and hoped goods would flow across the border between the EU and Britain in “much the same way as they do now” during the transitional period.

He told BBC Radio 4’s Today programme: “There will be a process between the date we leave the European Union and the date on which the new treaty-based arrangements between the UK and the European Union which we hope and expect to negotiate come into force.”

Mr Hammond did not say how long it would take to put the “necessary arrangements in place”, but said: “People have talked about a year, two years, maybe three years.

“I think there’s a broad consensus that this process has to be completed by the scheduled time of the next General Election, which is in June 2022.”

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Philip Hammond (Dominic Lipinski/PA)

He said there was a “broad acceptance” among the Cabinet for a transitional period after March 2019, and told the programme he could “envisage” a situation immediately following Britain’s departure “with many arrangements remaining very similar to how they were the day before we exited the European Union”.

He added: “But over time, those arrangements moving steadily with the introduction of new processes and systems until we get to the new end state, the new normal, that will be our long-term relationship with the European Union.”

The Chancellor said he recognised that it may “take some time” to “negotiate trade deals with third countries” following claims by former EU trade commissioner Karel De Gucht that the UK would not be able to strike a trade deal with the US before it has left the EU or during a transitional period.

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(Stefan Rousseau/PA)

Mr Hammond said: “We recognise that it will take some time for us to negotiate trade deals with third countries. The important point is that we are able to get started on that process and during a transition period when we would hope to have continued access to the European market.

“It may be that during that period we don’t bring those agreements into force, but it will take us time anyway to negotiate them.”

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Shadow Brexit secretary Keir Starmer (Stefan Rousseau/PA)

Shadow Brexit secretary Sir Keir Starmer said: “Labour has been calling on the Government to commit to appropriate transitional arrangements for a long time. If jobs and the economy are to come first, there can be no threat of a cliff-edge for businesses after we leave the European Union.

“The Chancellor now appears to accept this. However, in light of the clear divisions this week within the Cabinet, I hope the Chancellor was not merely speaking in a personal capacity.

“I also hope that this is the final burial of the flawed proposition that ‘no deal’ is a viable option.”

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