We’re out! Britain rejects EU offer of two-year Brexit extension

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But British counterpart David Frost insisted the deadline remains because the country needs political and economic freedom and does not want to pay huge amounts into EU coffers. Mr Frost said it is the “firm policy of the Government that we will not extend” the transition period and “we would not agree to it” if asked. He added: “We have always put a lot of emphasis on economic and political freedom at the end of this year and on avoiding ongoing significant payments into the EU budget.

“And, of course, those things are accomplished by ending the transition period at the end of the year.”

Under the terms of withdrawal from the EU, Britain only has until July 1 to decide whether to extend the transition period.

Mr Barnier had repeated the bloc’s openness to an extension in a letter to leaders of smaller parties in Westminster, including the SNP, Lib Dems and Plaid Cymru after they contacted him about the talks.

He said: “Such an extension of up to one or two years can be agreed jointly by the two parties. The EU has always said we remain open on this.”

The Brexit transition began when the UK legally left the EU on January 31 and will conclude at the end of the year.

PM Boris Johnson will meet EU leaders next month when it had been hoped the outline of an agreement could be agreed.

But Mr Frost said there is a long way between the UK and the bloc on reaching a trade deal and urged Brussels to make proper compromises.

He told MPs the UK believes the EU’s approach “in key areas is not a mandate that is likely to produce an agreement”.

He added: “If you’re asking do we think the EU needs to evolve its position to reach an agreement? Yes, we do.”

The EU’s demand for fishing rights to remain the same as they are now is a major stumbling block.

Mr Frost said: “To be fair, Mr Barnier has given a few public signals that he thinks this may not be a completely realistic position and we’ll have to see if they can move forward on that. Clearly it’s not a runner for us.”

Mr Frost said it is the job of a good negotiator like his counterpart to “assess reality and the genuine positions of the other side”.

He said: “If you don’t assess reality in a cold way then you don’t get agreements, and I would expect he’d be doing that, in fact I’m sure he is.”

Mr Frost said there is also a big gap over EU demands for so-called level playing field rules being established.

He said: “We have a fundamental disagreement at the moment on most aspects of the level playing field.” 

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