Catherine McGuinness, the most senior policy official at the City of London Corporation – the local authority for the Square Mile – told the chancellor on Wednesday that time was running out a deal to ease the UK’s exit from the EU.
In a letter to Hammond before next month’s budget, McGuinness said the UK was facing a “historically defining moment” and warned that the timetable for business to prepare for transition was “tightening very rapidly”.
“We must have agreement with the EU on transition before the end of 2017,” she added.
Hammond was unable to guarantee that there would be any substantial progress on transitional arrangements with the EU by Christmas, a key demand of five major business lobby groups earlier this week.
But he moved to reassure businesses that the UK was seeking to pin down some principles of the Brexit transition period as soon as possible, after Theresa May signalled that signing off the final arrangements could take another year.
The prime minister delighted Eurosceptics when she told the Commons on Monday that there would be no transitional deal until the UK had settled its final relationship with the EU, which would not happen until next summer at the earliest and possibly not at all.
However, Hammond struck a different tone 24 hours later, saying the matter of settling the transition period was “urgent and pressing” for businesses.
“Whilst we are preparing for all outcomes in our negotiations, the government’s objective is to reach a deal. As part of that deal, we want to agree an implementation period during which businesses and governments can prepare for the new relationship and we want to agree the principles of that period as soon as possible,” he said.
“Last week at the European council, the 27 agreed to start internal preparatory discussions on guidelines in relation to an implementation period. Together with broad support for the idea in parliament, this should give British businesses confidence we are going to provide them with the certainty they require.”
The City of London Corporation added its warning on Wednesday in McGuinness’s letter to the chancellor. She said some businesses were already activating contingency plans and more would do so without more substance from the UK and EU on the length and nature of a transitional period to smooth the path to a future relationship after Brexit in March 2019. [...]
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City of London Corporation letter to the Chancellor of the Exchequer
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