Top UK ministers: Brexit transition cannot be back door to staying in EU

By William James and Alistair Smout

LONDON (Reuters) - Britain needs a transition period to soften its exit from the European Union, but it cannot be used to stop Brexit, two senior ministers said on Sunday, signalling a truce between rival factions in Prime Minister Theresa May's cabinet.

May's Brexit strategy has been the subject of open debate among her top team ever since a botched June election which weakened her authority and exposed differences of opinion over how Britain should manage its departure from the bloc.

However, the pro-European finance minister Philip Hammond and ardent Brexiteer trade minister Liam Fox looked to end the debate by setting out a joint position in a newspaper article, as Britain said it was ready to push on with Brexit talks.

"We believe a time-limited interim period will be important to further our national interest and give business greater certainty - but it cannot be indefinite; it cannot be a back door to staying in the EU," Hammond and Fox wrote in a joint article for the Sunday Telegraph newspaper.

Hammond had previously angered pro-Brexit colleagues and some voters by raising the prospect of an exit deal that saw little immediate change on issues such as immigration when Britain leaves in March 2019, and which could last until 2022.

Such an arrangement was criticised by eurosceptics as a betrayal of the swift Brexit they wanted, and has even raised concerns the process would be stopped altogether after Britons voted in a referendum in June 2016 to leave the bloc.

PARTY CONFERENCE

But the article said the government strategy was not being watered down and Britain would leave on schedule, albeit with a transition period.

"We are both clear that during this period the UK will be outside the (EU) single market and outside the customs union and will be a 'third-country' not party to EU treaties," they said.

However it also confirmed that immigration controls - one of the key issues for voters who backed Brexit - would not stop all EU workers coming to Britain, saying that "borders must continue to operate smoothly" during the transition period.

"Once the interim period is over, we want a permanent, treaty-based arrangement between the UK and the EU which supports the closest possible relationship with the European Union, retaining close ties of security, trade and commerce," they said.

While the article presented a united front for approaching Brexit, there are still signs of division in the Conservative government, which lost its majority in June's election and now relies on support from a small party in Northern Ireland.

The election failure has opened May up to pressure from both sides of her party, and the Mail on Sunday reported that she would publicly apologise for the result at a party conference speech in October shore up her position.

Pro-EU lawmaker Anna Soubry, who has previously said that June's election result means that the party has no mandate to take Britain out of the single market, said the party could split if May gives staunch eurosceptics too much sway.

"Brexit is a self-inflicted wound; the people of this country hold the knife and they don't have to use it if they don't want to. The people, not the hardline Brexiteers, are in charge," she wrote in an article for the Mail on Sunday.

Former foreign minister David Miliband also said that Brexit would be an act of economic self-harm as he called for a second referendum on Britain's departure from the EU in the Observer newspaper.

(Reporting by William James and Alistair Smout; Editing by Alison Williams)