Brexit transition work to begin “immediately” after sufficient progress declared as business groups urge speed and clarity

Work on a Brexit transition period will begin “immediately” after sufficient progress in negotiations has been confirmed, Theresa May said last night, as business groups urged the government to seal a commitment in the first weeks of the new year.

During her first Commons update since being given the thumbs up by Jean-Claude Juncker to reach the second phase of Brexit talks, the Prime Minister said there was “a new sense of optimism now in the talks and I fully hope and expect that we will confirm the arrangements I have set out today in the European Council later this week”.

May added: “I expect that… work on a transition, or implementation, period will start immediately [after that point].”

The “general expectation” was that transition would be agreed within the first quarter, May said, pointing to Michel Barnier’s March timeframe.

May also confirmed that the methodology which appeared in the joint report published last Friday meant that the divorce bill would come in somewhere between £35bn and £39bn.

Her update came as business groups urged the government to grasp the nettle.

The Institute of Directors said securing a transition deal was the “biggest priority for us now that phase one is out of the way”.

“We need it to happen at the very latest, by the end of the first quarter,” said director general Stephen Martin.

Anastassia Beliakova, head of trade policy at the British Chambers of Commerce, agreed.

“The commitment to the transitional arrangement should be confirmed in early 2018, and we would like to see the intention for regulatory alignment with the EU – close or divergent – to become more clear, with all its implications, during 2018,” she said.

Martin told City A.M. said there was “ample reason for an uptick,” in industry engagement with government at this stage. “The IoD has continuously stressed to the government that engaging with business on its objectives will not jeopardise its negotiating position.”

Chief executive of the manufacturers’ organisation EEF Stephen Phipson, also called on government to “bring UK industry into the heart of the negotiations on a future transition or implementation deal, as well as the long-term future trade or partnership arrangements”.

He added: “it is critical that businesses have confidence the UK’s negotiators fully understand the implications of their actions.”