What will Brexit 2.0 mean for UK?

David Davis Image copyright Reuters

Welcome to the next phase.

The Brexit process never went away. But the beavering of officials has rather less political intrigue to it than the interventions of the Brexit big beasts.

Well, nipping in before the EU publishes its official approach to part two of the saga on Monday, David Davis will tomorrow have a big moment of his own.

The Brexit Secretary will make a speech formally setting out the UK's hopes and goals for the transition period with the aspiration it can all be sorted out by March.

It will mark the formal overture to the next phase of the Brexit talks, sorting out the two years or so after the UK has officially left the EU, but still has significant ties to its institutions.

Ministers have, after vigorous lobbying from business, accepted that not very much will change as the clock strikes midnight on Brexit day.

The PM has already made clear that we will broadly accept the existing rules and regulations, and ministers agree that although we will officially be outside the Single Market free trade area and the Customs Union, we'll replicate those arrangements so that industry isn't dealing with dramatic overnight change.

But the more precise nature of the period between 2019 and 2021 is not that clear. And there is brewing anxiety among Theresa May's Brexiteer base that what was billed originally as an implementation phase, where we move from one system to another, will be more like two years stuck in aspic.

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Media captionDavid Davis v Jacob Rees-Mogg on Brexit transition

That's why the new leader of the influential European Research Group of Tories, Jacob Rees-Mogg, so delighted in taunting David Davis in front of the Brexit committee yesterday, claiming that during that time the UK will be a "vassal state".

So tomorrow, Mr Davis will have questions to answer. I'm told that he will make clear the UK intends to negotiate and complete trade deals with other countries during the transition, to be ready to sign on the dotted line the moment the transition is over.

He's also expected to make plain the UK wants to remain within existing agreements that the EU has stitched together with other countries too.

One minister told me it's "reasonable enough" to hope to persuade the EU that can happen. Right now, Brussels' position is that when we're out, we lose out on those deals as well. But Brexiteers also want to know whether ministers are going to resist any new rules that come into force in the EU between 2019 and 2021.

If the situation is broadly the status quo, the EU expects that the UK will be bound by any changes that are made during that period, and also be bound by the European Courts.

I'm told that Mr Davis will acknowledge there has to be some kind of process, mechanism, or cunning wheeze, where the UK can make sure it is still in the room when decisions are made, even if technically we have lost all rights to do so.

But don't expect right now that there will be a fully-fledged solution to the political problem of us becoming a 'rule taker not a rule maker'.

There is plenty still to work out and plenty of worry on the Tory backbenches about what the government is willing to give for a smooth departure, and depending on exactly what Mr Davis says tomorrow, there could be ructions from Brexiteers in the coming days.

As ever, I'm told too that the speech has gone through several drafts.

But there's a view in government that the less time spent worrying about transition or implementation the better, the priority is to keep their eyes on the prize, and to persuade colleagues to focus on the end result, nail down transition then move on to the important final deal.

But nerves are beginning to jangle, and the start of Brexit 2.0 could up the pressure.

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