Brexit latest: David Davis admits Britain could be forced to settle for ‘bare bones’ deal

David Davis appearing before the Commons Brexit committee today
WEST END FINAL

Get our award-winning daily news email featuring exclusive stories, opinion and expert analysis

I would like to be emailed about offers, event and updates from Evening Standard. Read our privacy notice.

Britain could end up with a “bare bones” Brexit deal which business chiefs are warning could further hit the economy, a Cabinet minister admitted today.

Brexit Secretary David Davis also told MPs that he believes the UK can get agreement with Brussels on a trade deal within a year - an aim which many experts have dismissed as over-optimistic.

He also outlined the Government’s aim to agree the “form” of a transition deal, possibly of two years, in December, or at least shortly afterwards.

However, Mr Davis stressed that Britain wanted all the negotiations to be concluded, including on the trade deal and transition/implementation period by Brexit Day in March 2019.

He also made clear that he expects the negotiations may well go down to the wire as often happens in EU talks and that the UK does not want to be having to agree a trade deal after March 2019. given that its negotiating position could be weakened having already left the EU.

Appearing before the Commons Brexit committee, Mr Davis said: “What we are intending to do is get the form of the implementation period agreed quickly - December or thereabouts. But we want to conclude the overall negotiation by 2019,” he said.

“There are a number of reasons for that. One of them is: what is the implementation period taking you towards?

“Are you going from where we are now to a free trade agreement? Are you going from where we are now to what you might call a bare bones agreement, which is WTO (World Trade Organisation) plus agreements on the fundamentals like aviation, and so on? So you need to know where you are going.

“We are aiming for the conclusion of negotiations on all fronts - on the grounds that nothing is agreed until everything is agreed - by the end of March 2019.”

A Government spokesman said: “'We are leaving the EU in March 2019 and have committed to a meaningful vote in Parliament on the final deal once it has been negotiated. Today the Secretary of State was asked a number of hypothetical questions about the process but to be clear: the final deal will be agreed before we leave, and MPs will get a vote on it.”

Business chiefs have warned that having to rely on WTO rules to trade with the Continent, which would mean more tariffs on cars and other goods, would hit the economy.

Mr Davis also indicated that Britain may pay billions of pounds for EU pension liabilities as part of a political deal.

Asked about a demand for a payment reported to be up to £10 billion pounds towards the pensions of current European Commission officials, he said: I will have to make some political judgments later on, rather than legal ones.

“The legal basis is not strong for many of the claims.”

Mr Davis confirmed that the EU side had discussed a total “divorce” payment of 100 billion euros at one stage, saying the sum “was one of the aspirations”.

British legal experts have advised the Government that there is no legal requirement on the UK to pay a Brexit settlement, according to Whitehall sources. However, Theresa May last week signalled that she is prepared to pay tens of billions for the sake of a trade agreement.

In her Florence speech, the Prime Minister confirmed she will pay for existing budget commitments, adding up to around £18 billion.

But in the Brussels summit last week she signalled she could agree more, telling leaders of the 27 other countries that the Florence speech was “not the final word”.

Mr Davis’ today comments came after Theresa May appeared to suggest in the Commons that there could be no deal on a transition until there was agreement on Britain’s future relationship with EU - including a potential deal on free trade.

Her intervention led to warnings that businesses could be facing a “cliff edge” break when Britain leaves the EU in March 2019 if there is no overall deal.

Pressed by committee chairman Hilary Benn on whether he thought a free trade and customs agreement could be concluded in a year, he said: “Yes.”

The leaders of the other 27 EU member states agreed in Brussels last week to begin discussions among themselves on the transitional arrangements.

Mr Davis also told American banking chiefs not to “waste your money” by starting now to move staff and offices from the City to Frankfurt or Paris.

“If I was being asked this in front of a bunch of American bankers I would give them advice to save their money for the moment, at least until January,” he said.

Goldman Sachs has piled pressure on the Government over the Brexit talks, with the US bank’s chief executive, Lloyd Blankfein, saying he expected to be “spending a lot more time” in Frankfurt.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in

MORE ABOUT