Lord Owen calls for 'unilateral declaration' on future trading arrangements
Former foreign secretary Lord Owen has called on the Government to make a "unilateral declaration" on future trading arrangements, following reports the French and German governments have vetoed a post-Brexit transition deal until the UK settles its so-called divorce bill with the EU.
Lord Owen said while the Conservatives "dithered", Brussels was pursuing "classic delaying tactics", which would hurt the British economy.
Prime Minister Theresa May used her Florence speech to suggest a transition period, which would see the UK stay in the single market for two years after Brexit in exchange for continuing to pay into the EU budget and continuing to obey EU rules and regulations.
Reports in the Financial Times suggested France and Germany were resisting attempts to move negotiations on to a post-Brexit deal.
Lord Owen, who was foreign secretary in the Callaghan government, called on Mrs May to make a "unilateral declaration" on how the UK intends to operate in the absence of an agreement.
"It is now clear that the German and French governments have vetoed moving into discussions on the Prime Minister's speech in Florence," said Lord Owen, who was speaking during an event, Brexit Britain on the Global Stage, at the Cheltenham Literature Festival.
"We are witnessing the classic Brussels rolling out of delaying tactics compounded by the UK Government's dithering. It is all creating political uncertainty.
"If there is not greater clarity by the turn of the year, it will really start to hurt: investment projects can't be held on hold indefinitely, and there will probably be the first material cancellations in the first quarter if this continues.
"Since it looks as if the EU will keep stringing things out, my own strong preference now is for a UK unilateral declaration, as quickly as possible, of how the UK intends to operate in the absence of the EU being prepared to discuss the Prime Minister's speech in Florence."
Lord Owen said this should be the UK's "default position" for leaving the EU by March 2019, involving a two-year transition period prior to operating under World Trade Organisation rules.
He said Britain should remain in the European Economic Area (EEA) for two years and should introduce new fishing and agriculture policies and restrictions on freedom of movement.
"If the EU challenge our position as a non-EU contracting party to the EEA agreement, we should go to international dispute resolution using the Vienna Convention," he said.
"The UK should continue to operate the common external tariff for two years and run things exactly as now.
"EU goods can come in tariff free and on the current arrangements provided only that they reciprocate.
"If they don't, the UK should follow the time-honoured practice of tit for tat, up to World Trade Organisation levels.
"This default position, which would not involve the European Court of Justice but the European Free Trade Association Court, is a reasonable and fair way to proceed.
"Is it too much to hope that the House of Commons on a cross-party basis could come together on such a basis if the EU stand-off continues after October?"
European Commission chief Jean-Claude Juncker has declared it will take a "miracle" for the financial settlement to move on to the future relationship by the next meeting of the European Council.