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House of Lords committee to look into need for Brexit transition deal

A House of Lords committee is to examine the legal basis for, and potential costs to the UK of, a time-limited Brexit transitional period.28 Sep 2017

The new inquiry was prompted by prime minister Theresa May's recent speech in Florence, in which she said the UK would be seeking a "period of implementation" after the UK leaves the EU, during which both parties would be able to continue to access one another's markets on existing terms.

The EU select committee will also examine the implications of the UK failing to reach agreement with the EU on how a transitional period would work. It noted comments from Michel Barnier, the EU's chief Brexit negotiator, in response to May's speech, in which he pointed out that "existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures" would continue to apply if a transitional period was set.

The committee will begin hearing evidence as part of its inquiry on 10 October, with John Longworth of campaigning group 'Leave Means Leave' and economist Ruth Lea of Arbuthnot Banking Group scheduled to appear. It is also seeking written evidence until 26 October 2017.

May's Florence speech was seen by Brexit expert Guy Lougher of Pinsent Masons, the law firm behind, as an attempt to "break the current logjam" in negotiations between the EU and UK, which recommenced this week. The speech proposed a two-year 'implementation' period, during which the UK would honour its funding commitments to the EU, and a guarantee that the rights of EU citizens in the UK would be enshrined in the final withdrawal agreement.

In her speech, May confirmed that the UK would cease to be a member of the EU on 29 March 2019, at the end of the two-year negotiating period provided for by article 50 of the Treaty on European Union. However, she acknowledged that neither party would be "in a position to implement smoothly many of the detailed arrangements that will underpin" their future economic trading relationship, making a "strictly time-limited" transitional period of mutual benefit.

The inquiry intends to examine whether the Florence speech is a "good basis" for the UK and EU to reach agreement on Brexit, the potential stumbling blocks that remain and the likelihood of 'no deal' being reached following the negotiations. It will also look at the implications, both good and bad, of 'no deal'.

The committee will also look at the necessity of a transition or implementation period, the legal basis of such a period, the institutional structures that will be needed to support it and the likely cost to the UK in EU budget contributions. It will also consider how the UK-EU relationship could work during the transition period, and attempt to answer how long such a period should last.