Brexit no deal IS an option: We will act if EU ‘thinks it has UK over a barrel’ – Davis

25 Oct

10.05 BST: Pat McFadden, Labour, asks Davis about Conservative Chris Heaton-Harris’s letter to university vice-chancellors asing for a list of professors lecturing on Brexit and details on what they are teaching.

But Mr Davis says he’s not going to comment because he hasn’t seen the letter.

Mr McFadden asks if the UK is going to end up with a free trade agreement similar to Ceta (The Comprehensive Economic and Trade Agreement) between the EU and Canada.

Davis says no.

Mr Davis jokes he doesn’t “get the cultural reference” about Arsene Wenger.

09.55 BST: Mr Davis says we need a “warm and close relationship” on foreign policy once we leave.

Mr Rees Mogg asks whether we need to fulfill our Article 50 commitments before the EU fulfill their agreements.

Mr Davis says: “Nothing is agreed until everything is agreed, it applies both ways.”

Mr Rees Mogg says the transitional period means we are just in the European Union for two years longer than what we are aiming for.

09.53 BST: Jacob Rees-Mogg is next to speak.

He asks if Mr Davis agrees with the House of Lords committee saying the UK will not have to pay anything after it leaves. 

The Brexit secretary says he does not accept it and the UK will only legally owe the EU payments for about one year when it leaves.

He says it is more of a political issue than a legal one.

He says they don’t want to speculate on a no deal.

09.50 BST: Stephen Crabb, Conservative Party asks when will a transitional period be agreed upon.

As quick as we can, says Mr Davis. 

He says he does not expect it to come at the next meeting of the European Council in December but expects it to be agreed in the first quarter of 2018. 

He doesn’t think a trade agreement will be agreed by then.

Mr Crabb asks about American banks, they are already making decisions is there any point in a transitional period?

Mr Davis says that bankers need to look at the Florence Speech and the response. All businesses want “in black and white” what is going to happen, but they need time to think about what they’re going to do.

Were Hothouse, LibDem, asks that, as transition period can only happen if there’s a deal so does a near need to be agreed by next year?

Barnier would like ratification long before 2019, Davis concern is that the European Commission and Council needs to agree on it before then, so isn’t worried if the signing off process runs into the implementation period. 

Tory Peter Bone asks whether or not we can just extend our membership rather than having a transition

Brexit Secretary Davis says “We decided to leave, and leave effectively.” and stresses the two-year implementation period is a “one off”.

09.41 BST: Mr Davis says that a no deal is an option, but not the preferred option.

However, he said no deal will remain possible until the last moment.

He said: “It would not be the first time in European negotiations where some last minute claims come in because they think they have you over a barrel.”

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