BrexitMar 20 2018

Adviser body concerned about Brexit transition length

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Adviser body concerned about Brexit transition length

The UK's main financial advice trade body has raised concerns the Brexit transition period agreed yesterday is not long enough.

Yesterday (19 march) the UK and the European Union reached a conditional agreement for a 21-month transition period in order to negotiate a final free trade deal.

As part of the deal, the UK will agree to abide by all EU rules but will lose the ability to influence them.

John Barrass, deputy chief executive of the Personal Investment Management and Financial Advice Association (Pimfa), said: "We welcome the first joint draft agreement on transition arrangements close to the status quo as indicating that the government has listened to ourselves and others on the overriding need to avoid a cliff-edge or no deal Brexit scenario at the end of March next year.

"However, we note the short duration of the proposed transition period, as specified in earlier EU texts.

"This may allow insufficient time to negotiate the final UK/EU Comprehensive Agreement which will govern our future relationship after transition.

"Pimfa has made clear its preference for a flexible transition end determined by the completion and coming into force of the Comprehensive Agreement, so that firms know ahead of time what they will need to change towards and can plan appropriately."

The Brexit deal effectively extends Britain's membership of the EU single market and customs union until 31 December 2020 and allows the government and businesses to plan for any new regime which may emerge.

But the deal is still provisional and dependent on other matters being agreed. For example there has still been no agreement on how the border between Ireland and Northern Ireland will operate.

David Davis, the secretary of state for exiting the European Union, said: "Our teams have worked hard and at pace to secure the terms of a time-limited implementation period that gives the certainty demanded by businesses and citizens across the European Union and United Kingdom.

"Throughout this process, one message has been clear from businesses in the United Kingdom and across the European Union — that they need to be able to plan for the future with confidence.

"Businesses need not delay investment decisions, or rush through contingency plans based on guesses about the future deal.

"Instead they now have certainty about the terms that will apply immediately after our withdrawal.

"Meaning that they can continue to operate and invest with confidence, as the design of our future partnership with the European Union becomes clear."

damian.fantato@ft.com