Scottish and Welsh first ministers warn against no extension to post-Brexit transition period
The first ministers of Scotland and Wales, Nicola Sturgeon and Mark Drakeford, have written a joint letter to the prime minister asking the government to reconsider its stance on extending the post-Brexit transition period beyond the end of the year.
The first ministers argue that the disruption of the Covid-19 pandemic means that businesses require more time to recover and that putting them under the threat of a cliff-edge exit from the EU single market and customs union after December 31, 2020, would be “extraordinarily reckless”.
The two first ministers also said that an extension would avoid further unnecessary damage to the economy on top of the Covid-19 crisis, and that leaving only the remainder of the year for negotiations would pave the way to a no-deal scenario or, at best, a “bare bones” or "skinny" free-trade deal which does not encompass all key issues.
The letter also echoed concerns laid out by outgoing CBI chief Dame Carolyn Fairbairn this week, in that businesses had seen their stockpiles and reserves ran dry by the Covid-19 pandemic, leaving them entirely unprepared to face a no-deal scenario.
The letter said: "We are mindful that the Withdrawal Agreement only permits an extension of the transition period if this has been agreed before the end of June.
"At the time the Withdrawal Agreement was signed, no-one could have imagined the enormous economic dislocation which the Covid-19 pandemic has caused - in Wales, Scotland, the whole of the UK, in the EU and across the world.
"While we hope that the second half of this year will see the beginnings of a recovery, we believe that exiting the transition period at the end of the year would be extraordinarily reckless.
"No-one could reproach the UK government for changing its position in the light of the wholly unforeseeable Covid-19 crisis.
"We therefore call on you to take the final opportunity which the next few weeks provide, to ask for an extension to the transition period in order to provide a breathing space to complete the negotiations, to implement the outcome, and to give our businesses the opportunity to find their feet after the enormous disruption of recent months."
An extension must be agreed by July 1, and the UK government has long insisted it will not agree to any prolongation, even though the EU has said it is open to doing so.
This week, chancellor of the Duchy of Lancaster Michael Gove told the House of Commons that the transition period will not be extended “under any circumstances”, before adding on Friday that he had “formally confirmed” that the UK will not request any extension.
The concern within the government is that extended the post-Brexit transition period would keep the UK tied to the single market and customs union, prolonging uncertainty for firms and binding the UK into making further financial contributions to the EU budget.
Gove said: “On January 1, 2021 we will take back control and regain our political & economic independence".
Meanwhile, an intensive timetable of UK-EU talks running from June 29 to July 27 has been agreed between both sides, involving some face-to-face meetings should health guidelines allow it, in an effort to accelerate progress towards a free-trade agreement by the end of the year.