UK may not meet October deadline for Brexit deal, says Raab

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The UK and the European Union may not meet their self-imposed October deadline for a divorce deal, Britain’s Brexit minister has said.

Dominic Raab said October remained the goal, but there was a “possibility it may creep beyond that”.

Dominic Raab. Picture: Getty Images

Dominic Raab. Picture: Getty Images

He told a House of Lords committee the two sides were aiming for October, “but there is some measure of leeway”.

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Britain and the EU aim to hammer out an agreement on divorce terms and future trade by a European Council summit in October so that it can be approved by individual EU countries before the UK leaves the bloc on 29 March.

But talks have stalled amid divisions within Britain’s Conservative government over how close an economic relationship to seek with EU and the UK has ramped up planning for a disruptive “no deal” Brexit.

Mr Raab made the point during questioning this afternoon by peers on the progress of the Government’s Brexit negotiations.

A proposed divorce agreement hammered out by Prime Minister Theresa May’s government last month proposes to keep the UK close to EU regulations in return for free trade in goods.

The plan has infuriated Brexit backers in her Conservative party, who claim it would leave the UK tethered to the bloc and unable to strike new trade deals around the world.

It also has been received coolly by EU leaders, who claim Britain wants to “cherry pick” aspects of membership in the bloc without the full cost and responsibilities.

Mr Raab said Britain and the bloc were 80 per cent of the way to a withdrawal deal and urged the EU to show “pragmatism” in the negotiations.

“I’m confident that a deal is within our sights,” he said.

Mr Raab has declared the ultimate acid test around any final Brexit deal will be confidence in the City of London and in the UK as a broader provider of financial services.

The Brexit secretary said London was still top of the global financial centres index, with no EU financial centre in the top ten.

He said: “I think ultimately if we ended up with some of the worst-case scenario outcomes that some people have suggested, so that the EU would take this as an opportunity and, by the way I don’t believe this, to try and either hive-off large areas of the work that’s done in London or punish the City, I think the only winners would be the other global centres in the top ten like Tokyo and New York.”

The UK’s financial services were intertwined with the continental economy, he said, adding: “I’m not going to use the word fear mongering, but those sort of concerns have been, at least in some quarters, over exacerbated.”

Mr Raab said: “I think that’s why ultimately we’ll come to a sensible arrangement on this.

“At least on one estimate, one trillion pounds worth of UK financial services investment going into the continental economy. I think people would need to think very seriously about the impact of trying to choke that off, not just on businesses but also, as I said, the consumers that rely on those businesses in the EU.”