December 2018 is likely date for Britain's departure from EU, says Brexit czar

David Davis arrives at 10 Downing Street in central London, on July 13, 2016, after new British Prime Minister Theresa May took office.
David Davis arrives at 10 Downing Street in central London, on July 13, 2016, after new British Prime Minister Theresa May took office. PHOTO: AFP

LONDON (BLOOMBERG) - Britain's withdrawal from the European Union could begin around the end of this year, with December 2018 a probable date for departure.

Appointed late on Wednesday (July 13) by Prime Minister Theresa May, Mr David Davis will now be Secretary of State for Exiting the European Union, having campaigned to leave in last month's referendum.

Mrs May, who set aside her own misgivings to side with staying in the bloc, committed to handing the role to a pro- Brexit lawmaker during her push for the premiership.

A former Europe Minister in the 1990s, Mr Davis will aid Mrs May in deciding when to start the formal two-year process of withdrawal and then on trying to strike favourable deals over the separation and Britain's future relationship with the EU.

He will be closely watched by investors as the prospect of Brexit buffets markets and the global business community.

Mr Davis outlined his views earlier this week in an article for the ConservativeHome website which was reissued on Thursday.

He agreed with Mrs May by saying it was worth "taking a little time" before invoking official talks, although while she has said that could wait until 2017, he wrote it could happen "before or by the beginning of next year."

"Negotiating strategy has to be properly designed and there is some serious consultation to be done first," Mr Davis said, noting around the end of 2018 was the time for "probable formal departure" from the EU.


The new czar said his ideal outcome was continued access to the region's single market as well as more control of immigration. That will prove a tough ask of the EU's other 27 member governments unhappy with Britain's decision and unwilling to grant it the ambition of both continued access to the tariff-free trade zone and less free movement of EU citizens.

Diplomacy will be required at home, too, given last month's referendum ran so close. Mr Davis will need to prove to those who wanted to remain in the world's largest trading zone that the costs of Brexit will be limited, at the same time keeping onside those eager to sever ties swiftly.

He argued on ConservativeHome that leaving the EU would help the economy by allowing the government to regain control of trade policy, as well as cutting taxes and bureaucracy. "Brexit will deliver the circumstances that allow us to pursue an unfettered high growth strategy," he said.

A one-time chairman of the Conservative Party, Mr Davis was favoured by some to become its leader in 2005, only to lose out to Mr David Cameron. He previously represented the Conservatives in opposition on home affairs matters such as national security, prisons and immigration.

In 2008, he resigned his parliamentary seat to protest what he saw as the erosion of civil liberties, forcing a special election that he then won.


Separately, Mrs May appointed former Defence Secretary Liam Fox, another pro-Brexit campaigner, as secretary of state for international trade. He will have to establish new commercial links outside of the EU.

By becoming a high-profile policy maker, Mr Davis runs the risk of being the target of public ire if negotiations disappoint either side of the Brexit debate. He also will know that Mrs May will still serve as the chief interlocutor for counterparts such as German Chancellor Angela Merkel.

She vowed on Thursday to "forge a bold, new positive role" for Britain outside of the EU.

The new government will still come under pressure both from Brexiteers and foreign leaders to move faster, especially after Mrs May took power almost two months earlier than expected.

The UK Independence Party will likely lead the charge against any perceived foot-dragging.

Whenever the negotiations do begin they will be fraught. European Commission President Jean-Claude Juncker warned before the June 23 referendum that Britons would be treated as "deserters" and face "consequences" if they broke away. Conceding too much to Britain would embolden euroskeptics elsewhere in the region.


At the same time, Dr Merkel said on Wednesday that Britain needs time to think about the kind of relationship it now wants with the EU, a signal she may be willing to do a deal to ensure German carmakers and other industries avoid having to pay tariffs to trade in Britain.

What's unlikely to be offered is what Brexiteers told voters they could have. "The UK won't be able to access the single market without applying the rules of freedom of movement," French President Francois Hollande said after the referendum.

Talks also are likely to be drawn out. Mr Philip Hammond, then the foreign secretary and now Mrs May's chancellor of the exchequer, said this week that it could take six years for Britain to untangle itself from the EU.

Among major European negotiations since the early 1950s, only 1958's Treaty of Rome took less than 24 months, according to Morgan Stanley. The Lisbon Treaty took 94 months from the formal start of negotiations to taking effect.