U.K. Trade Boss Denies Free-Movement Deal as Cabinet Rift Widens

(Bloomberg) -- U.K. Trade Secretary Liam Fox dismissed claims that British ministers have agreed to allow the free movement of people for as long as three years after leaving the European Union, exposing fresh rifts in the government’s Brexit strategy.

Continuing free movement after 2019 would “not keep faith” with voters’ decision to leave the EU, he said in an interview with the Sunday Times newspaper. “I have not been involved in any discussion on that,” he said.

Fox’s comments add weight to concern about the inconsistencies among senior government figures in the Brexit process. Chancellor of the Exchequer Philip Hammond said on Friday ministers had a consensus that even if the U.K. departs the EU in March 2019, nothing should change the next day. Instead, the cabinet wants the status quo for two or three years. 

Any transitional arrangement “has to be an agreement by the cabinet,” Fox said in the interview. “It can’t just be made by an individual or any group within the cabinet.”

The chancellor’s plan also came under fire from Gerard Lyons, a pro-Brexit economist who was an adviser to Foreign Secretary Boris Johnson when he was London mayor.

‘Perceived Risks’

The transition phase should not exceed two years, Lyons wrote in the Sunday Telegraph newspaper. Accusing Hammond of taking advantage of Prime Minister Theresa May’s absence for a holiday to publicize his own views, he compared “alarmist talk” about Brexit to fears before the turn of the 21st century that a “Millennium Bug” would cause computers to stop operating.

“Many of the ‘risks’ being highlighted about Brexit are perceived risks, not real risks,” Lyons wrote. “And a two-year transition would alleviate many concerns.”

Amid divisions in Britain’s negotiating position, Luxembourg’s Prime Minister Xavier Bettel said the U.K. must face up to the fact it could be forced to pay more than 50 billion pounds ($66 billion) to leave the EU, according to the Mail on Sunday.

He believes the bloc should also use Brexit as an opportunity to take revenge for the U.K.’s 1984 negotiation of a yearly rebate, the newspaper said.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net.

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Steve Geimann, Tony Halpin