Theresa May faces a row over how the Brexit transition period will work after the EU said the UK would have to abide by all existing and new laws for a period of almost two years after leaving.
Downing Street said there was “some distance” between what the UK and EU believe is acceptable for the transition period and signalled it would fight against having to submit to new laws.
However, the prime minister may have little choice but to accept the bulk of the proposals despite considerable anger among hardline Brexit supporters on the Tory backbenches.
The 27 other EU member states took only two minutes to agree a negotiating position on Monday that proposes a “status quo” transitional period from 30 March 2019 and until 31 December 2020.
During this time the UK would have to accept the rules of the single market, customs union, free movement and decisions of the European court of justice, including new EU laws that come into force. Britain would no longer have ministers, diplomats or MEPs at the table when EU laws are agreed, or a commissioner involved in drafting them. It could be invited to attend some meetings without voting rights – but only at the EU’s discretion
The EU’s chief negotiator, Michel Barnier, along with leading European politicians, rebuffed any suggestion that the UK government would have the right to resist the application of new laws coming from Brussels during the transition period. Any EU national arriving in the UK before the end of the transition period would benefit from the agreement on citizens’ rights that applies to those already in the UK.
In “exceptional cases”, a mechanism would be established to allow the UK to be heard on sensitive new regulations, Barnier said during a press conference. But Brussels would not offer a right to veto laws or regulations, and there would be no “observer status” for the departing member state on even technical financial issues where the UK has expertise, he added.
“We will find a practical way of dealing with this,” he said. “But I haven’t heard anyone talk about observer status ... that is not what it will be [because] the UK is leaving the EU’s institutions. The UK is asking to keep the economic status quo for all the reasons that are of interest to it and maybe of use to us as well, so we will make provision for the transition period.”
Barnier also warned the UK that there would be no transition period agreed at all unless remaining issues relating to the first phase of talks were finalised and put into a legal document agreed by both sides. Translating the the EU-UK agreement on keeping a soft border in Ireland into water-tight legal text is understood to be proving problematic.
Speaking to a committee of peers, David Davis, the Brexit secretary, made clear the UK would oppose the EU’s decision that all its laws and regulations would continue to apply until the end of 2020.
“There will be an argument, I’m sure, about the issue of whether we can object to new laws that we haven’t had a say in,” he said. “There will be discussions about issues like representation on technical committees. Bear in mind we are very often the prime mover in areas like aviation [and] pharmaceuticals. The regulators tend to be Brits because we are good at that.”
Brexit supporting cabinet ministers including Boris Johnson are among those understood to have serious reservations about a transition deal that binds the UK to all new EU rules and regulations without the ability to object or opt out.
Davis had said on Friday that the UK hoped to “agree an appropriate process” to resolve concerns “if laws are deemed to run contrary to our interests”.
May’s official spokesman said the government was pleased the EU had now agreed its position, which was “well aligned” with the proposal on transition made in her Florence speech.
“But this will be a negotiation and there will naturally be some distance between the detail of our starting positions,” he added.
The EU’s position on abiding by its rules caused immediate anger among some Brexit-supporting MPs, with Bill Cash granted an urgent question in the House of Commons to challenge the government about the transition proposals.
“Given that we’re leaving the EU and therefore the customs union, the single market and the provisions relating to freedom of movement, is the government going to reject this new EU ultimatum – including that the [European] court of justice will continue to apply to the UK?” he said.
John Redwood, another hardline Brexit supporter and former cabinet minister, said: “Many of us want new borders, fishing and agriculture policies and the reduction of taxes the EU insists on where we do not agree. To get on with improving these we do not want a two-year so-called transitional period if that means we can’t take control of our laws, borders and money.”
Last week, Jacob Rees-Mogg, the leave-backing Tory MP who chairs the European Research Group, accused the government of threatening to turn the UK into a “vassal state” during the transitional period.
As well as the issue of transition, May is under increasing pressure to spell out what she would like to see in terms of the UK’s future relationship with the EU. Downing Street declined on Monday to comment on reports that the German chancellor, Angela Merkel, had told reporters in a private meeting that whenever she asks May what she is seeking, the prime minister responds “make me an offer”.
Barnier also voiced his frustration at the failure of Downing Street to present its vision of a future relationship. However, he appeared to suggest that the initial October deadline for agreement on a deal could be pushed back, as suggested by Davis, while being mindful of the need to find time for ratification by European parliaments, including the Commons and Lords.
Barnier said: “We will be preparing our position among the 27, but it is very clear, very important that the UK voices its position on what it wants in this future relationship.
“We can’t go too close to the end of the year [to have an agreement]. We are working towards end of October anyway.”
