Hammond says UK must seek 'middle way' in Brexit talks

Brexit: David Davis and Jacob Rees-Mogg spar over extending Article 50

Brexit: David Davis and Jacob Rees-Mogg spar over extending Article 50

The EU negotiating team led by Michel Barnier will, EU sources said, be ready to receive Davis and his officials for formal negotiations on what will happen after Britain leaves in March 2019 once EU ministers formally endorse Barnier's binding instructions at a meeting in Brussels on Monday.

Jacob Rees-Mogg clashed with Davis earlier this week and warned that Britain would remain the EU's "lackey" until the transition period ended.

Mr Davis said the Chancellor had simply been making the point that little would change during the transition period after Britain left the EU.

Davis is trying to placate pro-Brexit lawmakers in Britain who accuse the government of being too timid in negotiations with the EU.

"We will not be subject to the duty of honest cooperation, which is what stops us arriving at trade deals now, negotiating and signing trade deals now, so that freedom will exist".

"This is the Prime Minister that gave us absolute clarity after the Brexit vote that we were going to get back control of our laws, our borders, our money - the most profound strategic decision any prime minister has to make in the current circumstances".

In response, a Downing Street source said: "While we want a deep and special economic partnership with the European Union after we leave, these could not be described as very modest changes".

"For the first time in more than 40 years, we will be able to step out and sign new trade deals with old friends, and new allies, around the globe".

The speech by Davis comes as Number 10 sought to contain a row over Hammond's comments at the World Economic Forum in Davos.

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Speaking to a parliamentary committee, Davis said Britain's ties with the European Union would "look exactly the same" during what Britain hopes to be two years after Brexit to allow customs, businesses and politicians prepare for a new deal with the bloc.

"The one advantage we have is that we're free from honest co-operation?" asked Rees-Mogg before suggesting: "Can't we be a bit insincere now and get on with it?"

The Brexit Secretary said he was "relaxed" about the transition because it was the future deal that was most important.

"And it's a fact our economies are integrated, that's the baseline from which we leave the single market and customs union - which clearly represents change".

European Union negotiators are set to insist that "exceptionally, on case-by-case basis" other European Union states could "invite" Britain to observe meeting without any right to influence their content - but only if it is in the interests of the European Union, or the issue exclusively about the UK.

After winning the June 2016 referendum, many Brexit or Leave campaigners feel they are losing ground to voices questioning the meaning of the vote, a debate which has deepened divisions and prompted some to predict a "Brexit betrayal".

While an agreement was reached between the United Kingdom and the European Union in December past year to guarantee "regulatory alignment" and avoid a hard border scenario, fresh doubts have already begun to emerge as to how this can be achieved.

I'd say to anyone who is anxious about this issue: "don't be", he said, calling it a "moral issue".

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