The government has given the strongest signal yet that the Brexit process could take a lot longer than the two years needed for the official Article 50 exit process to be completed.
The Chancellor, Philip Hammond, has said that most “thoughtful” politicians, officials and businesses from Britain and the rest of the European Union realise that the two year deadline is simply not achievable. The government position is becoming clearer.
By the end of the Article 50 timetable – which Number 10 believes will be March 2019 – the UK will have legally agreed to leave the EU. But it will not be like jumping off a cliff edge. Rather, Britain and the EU will still have a close relationship, with many EU rules remaining in place. They will slowly be unravelled over subsequent years as Brexit is made a reality.
Many businesses will welcome the strong guidance from the Treasury. The financial services sector and other large UK businesses fear that the substantial amount of work needed to reformulate the relationship with the rest of the EU is simply not possible in two years. Mr Hammond appears to be preparing the ground ahead of the next general election.
By the time Theresa May goes to the country in 2020, the UK will have agreed to leave the EU. But, in practical terms, we may well not have actually fully left.