Officials said the UK needed “economic flexibility” to recover from Covid-19 and that the government would refuse any EU calls for an extension to the negotiations.
No10 said that the government would not extend the transition period because the economy needed to be free of EU rules to recover from the impact of Covid-19.
The UK is bound to EU trade rules until December 31 this year while negotiations about future relations with the bloc are underway.
Talks between the two sides have stalled because of the ongoing coronavirus crisis, but are set to continue through video conferences.
The Prime Minister’s official spokesman told reporters today: “We will not ask to extend the transition period, and if the EU asks we will say ‘no’.
Downing Street flatly rejected pleas from the International Monetary Fund to delay trade talks until after the deadly bug has passed.
Kristalina Georgieva, the IMF’s chairwoman, said: “It is tough as it is. Let’s not make it any tougher.”
Speaking to the BBC, she said: “My advice would be to seek ways in which this element of uncertainty is reduced in the interests of everybody, of the UK, of the EU, the whole world.”
The PM’s spokesperson swiped back today: “Extending the transition would simply prolong the negotiations, prolong business uncertainty and delay the moment of control of our borders.
“It would also keep us bound by EU legislation at the point when we need legislative and economic flexibility to manage the UK response to the coronavirus pandemic.”
Ministers, however, are privately discussing the possibility of renewing the transition period on a month-by-month basis until an agreement has been reached, avoiding Britain paying billions to stay in the single market.
A source told the Sun: “We’re determined to keep our promise.
“There is no way we will commit to a long extension. But in case extra time is needed, we’ve offered to renew the period for a month at a time until the deal is signed and sealed.”
Ms Georgieva also heaped praise on the emergency measures taken by the Treasury to limit the economic impact of coronavirus.
She said: “That very strong package of measures is helping the UK, but given the UK’s sizeable role in the world economy, it’s actually helping everyone.”
In March, Chancellor Rishi Sunak announced that the government would back loans worth at least £330 billion – the equivalent of 15 per cent of the British economy.
He also said the government would pay up to 80 per cent of workers’ wages to keep businesses afloat.
Despite this, it emerged last night that only 6,020 loans to small businesses have been approved so far.
UK Finance admitted only 28,460 firms have been allowed to formally apply despite 300,000 inquiries.
In four weeks of the scheme so far, just £1.1billion has been paid out to desperate companies struggling to stay afloat.
