The European Union is set to tempt the government into extending the Brexit transition period in a bid to break the current stalemate.
The EU’s chief negotiator Michel Barnier is said to have proposed a two-year extension in order to give more time for Britain to strike a full trade deal with Europe.
The plan would face fierce opposition from Brexiteers and could risk even more letters of no confidence being written to the 1922 committee. But Remainers would welcome the chance to have more time to campaign for a People’s Vote.
The move would also give diplomats more time to find a means of avoiding a hard border in Northern Ireland and avoid the use of the backstop.
Under the draft Withdrawal Agreement published last week, the transition period would begin when the UK leaves the EU on March 29 and run until December 31 2020.
During the transition, EU law will continue to apply in the UK and Britain will continue to participate in the customs union and the single market.
There is a one-off option for the UK to seek an extension of the transition if negotiations on the future relationship are still continuing.
According to the Financial Times, Barnier told EU ambassadors in a diplomatic note that the transition period could be extended until as late as December 2022.
During the extended period, the UK could have to continue to allow the free movement of people from the EU and keep making large payments to Brussels.
In October, Theresa May confirmed she was ready to consider a delay of ‘a matter of months’ in Britain’s final departure from the EU in order to avoid a hard border in Ireland.
The prime minister previously said she did not expect any extension of the transition period to be needed, because she hoped to conclude a deal on the UK’s future trade and security relationship with the EU by its scheduled end-date of December 2020.
In his reported communique, Barnier is said to have noted that the political situation in Westminster is ‘volatile’.
Any extension to the transition period would be mutually agreed between the UK and the EU.
Meanwhile, the prime minister could also face criticism of failing to overcome the final barriers to sealing a full trade deal with the EU.
CBI president John Allan said that, while Barnier’s intentions in proposing an extension may have been constructive, such an announcement ‘may not be particularly helpful’ at this point in time.
He told BBC Radio 4’s Today programme: ‘I think he’s trying to be helpful and trying to reduce the risk that the backstop will be needed. Him saying it just at this moment may not be particularly helpful, but I think his intentions are probably good.
‘We all hope it won’t be necessary, that the discussions on our future economic relationship with the EU will be concluded by the end of 2020 and within the existing transition period.
‘But remember, that transition period only comes into effect if Parliament approves the Withdrawal Agreement. Otherwise we’ve got the cliff-edge in March next year.’