LONDON (BLOOMBERG) - Leaders of the campaign for Britain to quit the European Union rejected a plan reportedly being devised by Bank of England Governor Mark Carney to negotiate a "buffer" to allow companies to adjust to the United Kingdom leaving the bloc.
Former Justice Secretary Michael Gove, who failed in a bid to lead the Conservative Party after David Cameron quit in the wake of the June 23 referendum, on Sunday (Nov 27) said transitional arrangements won't be needed as Britain quits the customs union and the "bureaucratic web" of the single market.
Carney has held private meetings and dinners with executives to gain support for a plan to let British companies remain in the single market for at least two years after the country leaves the EU, now scheduled for early 2019, The Sunday Times reported, citing a banker who attended one of the dinners.
"There are some people who can't get over the fact that the British people have voted to leave the European Union and want to have a transitional arrangement that is as close as possible" to staying in the bloc, Gove said when asked about Carney's proposal in an interview on "The Andrew Marr Show" on BBC television.
"It's far far better to provide people with certainty and to do so by having a clear, clean and simple approach."
Former Prime Ministers John Major and Tony Blair have said there is a case for holding a second referendum on the terms of Britain's departure from the EU, a proposal also rejected by Gove.
Prime Minister Theresa May, who wants to start the two-year countdown to Brexit as soon as March, faces tough negotiations with European leaders and British lawmakers about the terms of the country's departure.
The UK economy has proved resilient since the June referendum, although the pound has fallen about 15 per cent amid fears that losing access to the single market will hurt businesses.
May said she has lost sleep over the negotiations, having taken the job at a "hugely challenging time" for the country.
"It is a moment of change. It is a hugely challenging time. And we need to get on with the deal in terms of Brexit," she said in response to being asked "what keeps you awake at night?" by a reporter from the Sunday Times Magazine.
"We can make a success of it, we will make a success of it, but these are really complex issues."
Carney's proposal would allow companies to continue using current rules until at least 2021, allowing additional time to adapt to trading conditions after Brexit. Neither the Bank of England nor May's office responded to requests for comment on the Sunday Times report.
The proposal comes a month after Carney offered to stay on as governor until June 2019, to help with an "orderly transition to the UK's new relationship with Europe", ending months of speculation about his future.
Work and Pensions Secretary Damian Green, who campaigned to stay in the EU, said it is important that people don't see the talks with other European leaders as "binary".
The negotiations need to be more nuanced than just a question of being "in or out", he said, and there could be different agreements for different elements of EU membership.
"There's a sensible renegotiation to be had that will be as beneficial to Britain as possible and as beneficial to the other members of the European Union," Green said in an interview with Sky News.
"The idea that it's black or white, that you're in or out of these different bits of the institutions, it's more complex than that."
Emily Thornberry, foreign affairs spokeswoman for the opposition Labour Party, said the government should negotiate for the benefit of the whole population, not the "extreme 5 per cent of the 52 per cent" who voted for Brexit.
"At the moment we cannot even have a debate as to how it is we are going to leave the EU because the government are keeping their cards close to their chest. It's about time they told us in what way we are going to leave the European Union," she told the BBC.
"It needs to be taken step by step. They won't even take the first step. Let's start with what it is the government wants to negotiate and then we can decide how we want to proceed."