Brexit transition period must end by 2021, says Barnier

Boris Johnson leaves the Cabinet Brexit committee meeting
Credit
Getty

Boris Johnson leaves the Cabinet Brexit committee meeting Credit Getty

She looks set to avoid a second parliamentary rebellion over plans to enshrine Brexit day in law, by agreeing to another amendment giving some flexibility to move the date - March 29, 2019 - if negotiations with the European Union go down to the wire.

The House of Commons will hold its eighth and final day of detailed scrutiny of the EU (Withdrawal) Bill, which would formally end Britain's membership of the bloc and transfer EU rules into British law.

The cabinet did not discuss the stance of European Commission chief negotiator Michel Barnier whose vision of a trade agreement similar to that struck with Canada in 2016 differs sharply from Mrs May's demand for a bespoke United Kingdom deal delivering a "deep and special partnership".

European banks offering wholesale finance, money and services provided to businesses and each other, would be able to continue operating through branches without having to go through the expensive process of creating subsidiaries, the BBC said, without citing sources.

British Prime Minister Theresa May had asked for the transition to last around two years. Brussels has signalled a detailed trade deal is likely to take much longer, and that Britain's transition period must end by 2020.

London wants to make sure that Gibraltar is included in any transition deal with the European Union when the United Kingdom leaves the 27-nation bloc.

In a move that will please many Brexit supporters, she ruled out the option of a Norway-style membership of the European Economic Area as "democratically unsustainable" because it would mean the United Kingdom having automatically to observe rules and regulations which it had no influence over.

In response to Barnier's warnings to the City, Carney said: "I don't accept the argument that just because it hasn't been done in the past, it can't be done in the future".

European Union retail banks that hold United Kingdom customer deposits above a certain threshold would have to become subsidiaries, the BoE has already said.

This is slightly shorter than the 2-year transition that was thrown in the air.

But they are still unclear on what Britain wants from the future relationship, including the shape of any trade deal.

May has already accepted in theory that the ECJ will continue to have jurisdiction and that London will have no legal basis to conclude its own trade deals during transition the period.

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