Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team David Davis set to make major speech tomorrow on transition period… 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. – BBC News UK wants ‘good faith’ clause in Brexit transition deal – FT (£) …as Jacob Rees-Mogg warns UK risks being EU’s ‘lackey’ during Brexit transition during row with David Davis Britain could be left as the European Union’s “lackey” during the Brexit transition period, Jacob Rees-Mogg has warned after David Davis said Brussels could impose new laws on the UK after the point of withdrawal in March 2019… The Brexit Secretary said the UK would be free to negotiate its own trade deals during that transition period but his suggestion that Britain will not impose any of its red lines is likely to spark major concerns among Eurosceptics… Mr Rees-Mogg said the Government’s Brexit strategy now sounded as if the UK would remain a “de facto” member of the bloc until the transition period ends. – Telegraph (£) David Davis and Jacob Rees-Mogg spar over extending Article 50 – Sky News May faces Eurosceptic rebellion over Brexit transition plan – FT (£) Forget pink, David Davis just rubbed out the government’s negotiating red lines – Katy Balls for the Spectator Brexiteers are getting worried. So why is David Davis laughing? – Michael Deacon sketch for the Telegraph (£) Theresa May’s new Brexit strategy: jump first, argue later – Philip Stephens for the FT (£) Crippling Cabinet indecision is costing Britain the Brexit war – Peter Foster for the Telegraph (£) > WATCH: Jacob Rees-Mogg questions David Davis on the ‘ECJ red line’ David Cameron admits Brexit ‘has turned out less badly than we first thought’ David Cameron has been caught on camera admitting that Brexit has “turned out less badly than we first thought” and that it is a “mistake, not a disaster”. The former Prime Minister, criticised as the architect of what was described as “Project Fear” ahead of the EU referendum, said the UK’s withdrawal from the European Union will be “difficult”. In a conversation with Lakshmi Mittal, the steel tycoon, at the Davos summit of World leaders in Switzerland, Mr Cameron said: “It’s frustrating – as I keep saying it’s a mistake, not a disaster. It’s turned out less badly than we first thought. It’s still going to be difficult.” Mr Cameron made the comments as he attended the World Economic Forum. – Telegraph (£) David Cameron: Brexit turned out ‘less badly than we first thought’ – Politico David Cameron’s off-guard view on Brexit caught on camera – Sky News Is even David Cameron coming round to Brexit? – Express editorial > WATCH: Cameron admits Brexit is ‘not a disaster’ Sterling surges against dollar as employment rate hits joint all-time high The pound is on track for its strongest month for eight years, giving relief to Britons planning foreign holidays but signalling an end to the benign spell for exporters. Sterling surged above the $1.42 mark and came close to €1.15 on the back of strong jobs and wages data yesterday… The number of people in work in Britain rose by 102,000 to 32.2 million in the three months to November, according to official data, defying expectations of a slight fall. The employment rate stands at 75.3 per cent, the joint highest since records began in 1971. Regular wages rose at their fastest in a year. – The Times (£) Liam Fox backs Boris Johnson’s call to use Brexit dividend to increase NHS funding Liam Fox has backed Boris Johnson’s call to use the UK’s Brexit dividend to boost NHS funding. The International Trade Secretary said it would be “absolutely unthinkable” that the health service would not benefit from the money made available as a result of Britain’s withdrawal from the European Union… Mr Fox backed Mr Johnson’s call for extra funding for the NHS but insisted decisions on spending would need to be taken once the UK has left the EU. – Telegraph Non-EU doctors turned away from NHS vacancies under visa quotas – The Times (£) Boris Johnson knows what the public want out of Brexit. Mock him, Remainers, at your peril – Asa Bennett for the Telegraph (£) Brexiteers should do more for the NHS than just bung it more cash – Nicola Blackwood for the Telegraph (£) Boris Johnson’s cry for NHS cash was a shining moment as Theresa May bumbles through the dark – Trevor Kavanagh for The Sun Italian Prime Minister says Brexit deal must include financial services… Italian leader Paolo Gentiloni said that any accord reached between the U.K. and the European Union must include financial services. Gentiloni, in an interview at the World Economic Forum in Davos Wednesday, said that among the remaining EU states there was a “strongly prevailing position supporting the necessity of having a good deal with the U.K.” Financial services “will be part of the agreement,” since excluding them “is totally unrealistic,” he said… French President Emmanuel Macron suggested in a BBC interview over the weekend that a deal could cover aspects of financial services, “but it depends on what you’re ready to put on the table in terms of precondition.” – Bloomberg Italy PM sees good attitude for compromise on Brexit – Bloomberg …as Merkel says EU is “generally open to any sort of partnership” with UK… The German chancellor said the EU aimed for a “good partnership with the U.K. in the future” but it is up to Britain “to tell us what kind of partnership they want.” Merkel added the EU was “generally open to any sort of partnership” but noted there could be no compromise on the bloc’s core principles. She said Britain’s decision was “regrettable” but “it has given us internal courage to concentrate on the main tasks.” – Politico Germany’s young socialists use Corbyn tactics to torpedo Merkel – The Times (£) …and Finland backs smooth Brexit deal but warns EU it will not help fill the €15bn Brexit budget black hole Stumping up more cash to fill the €15bn (£13bn)-a-year black hole left in the EU’s budget by Brexit would be “unbearable” for Finland, its Europe minister has told the Telegraph, as deep divisions open up on the continent over how the bloc’s spending should be reformed… Mr Terho warned that Europeans who took Brexit as giving Brussels the green light for a new round of European federalism had drawn an “absolutely wrong conclusion of Brexit”, which instead pointed to the precise opposite… Mr Terho added that Finland would push for a Brexit deal that allowed trade to be as “smooth as possible,” and hoped that the UK would continue to be a “close friend” in defence and security cooperation. – Telegraph (£) Polish PM says UK must pay for EU access – BBC News Brexit may amplify east-west EU friction – Tony Barber for the FT (£) OBR boss Robert Chote claims Brexit and austerity have harmed economic growth Chote, who was chairman of the Social Democratic Party association at Cambridge University (and stood for the Liberal merger as a county council candidate in 1989), did not tell me how he voted in the EU referendum (“It’s a secret ballot, I shall respect it”). But he did tell me that the Brexit vote had harmed economic growth: “In terms of the net effect on GDP, the hits to demand have outweighed the boosts”. – George Eaton for the New Statesman > Ruth Lea on BrexitCentral today: No, Robert Chote, it is not clear that Brexit harmed the economy JD Wetherspoon boss insists Brexit won’t force prices up as sales grow Tim Martin, the Brexit-backing boss of JD Wetherspoon, has insisted Britain’s departure from the EU won’t force up food prices as the pub chain revealed strong sales for the Christmas period… The chain’s founder also attacked business groups including the British Retail Consortium and the CBI for claiming food prices would rise after Brexit. He added: “Provided that parliament takes sensible steps, such as the elimination of food taxes, the public will benefit from lower food prices, from regained fishing rights and from savings of about £200m per week of EU contributions.” – Telegraph Crest Nicholson boss says he was wrong on Brexit as economy proves to be “reasonably robust” – City A.M. National Audit Office report finds Department for International Trade struggling to develop specialist trade skills among staff… Liam Fox’s Department for International Trade (DIT) has been panned for falling behind its Brexit responsibilities, which risks hindering British businesses… The NAO report said: “Delivery of the work streams will be challenging and DIT has put back some of its delivery milestones as the timetable for legislation and the overall negotiation process has moved on.” It also said the civil service model, which sees staff move every few years, is “not best suited” to developing specific trade and negotiation skills, adding there will be a “premium” on retraining and recruiting outside staff. “Considerable work will need to be done to build skills that have not existed in government for a generation,” the NAO said. – The Sun Key Brexit department criticised for falling behind schedule – Guardian …as former DIT Permanent Secretary writes article opposing Brexit Sir Martin Donnelly was Permanent Secretary for the Department of International Trade until last year. He has just written an article for InFacts, the mad pro-EU spin shop. InFacts’ own website makes clear on its homepage that it wants to ‘Stop Brexit’… In his article Donnelly paints a very pessimistic picture of what would happen if the UK leaves the single market – i.e. Brexit… Donnelly then talks about the problems that would arise “if” the UK leaves the customs union… This man was in charge of the Department for International Trade. The whole point of his department is to sign trade deals outside the customs union. Did he not believe the UK would be leaving the customs union when he was perm sec? How did he ever get the job? – Guido Fawkes Michael Gove: Brexit is a chance to take back control of our environment One of the main reasons why I campaigned for the U.K. to leave the EU was the long-term harm inflicted by the CAP and the Common Fisheries Policy (CFP). Both have been reformed in their time — gone are the heavily-subsidized butter mountains and wine lakes; North Sea cod stocks are better than they once were — but neither properly put the environment first… We believe there is a better way. If Brexit is our chance to take back control of our laws and our money, Green Brexit is our chance to give the environment a voice in this time of national renewal. Once the U.K. regains control over environmental policy we will draw upon our record of conservation, home and abroad, to take full advantage. – Environment Secretary Michael Gove MP for Politico Howard Shore: Without financial services there’s really no deal at all The EU’s general exclusion of services from their trade deals is arbitrary. Just because their recent trade deals don’t generally include services, does not mean that they should be excluded from the one about to be negotiated with the UK, a departing member state. The point of a negotiation is to arrive at a mutually beneficial and fair outcome for both sides. In excluding services, the EU is effectively telling Britain that its world-leading services do not qualify. Britain could, in turn, retaliate. Without this, Britain could easily target member states’ imports in sectors where we buy substantially more of their goods than they do of ours. – Howard Shore for the Telegraph (£) Lord Strathclyde: Labour peers should not go against the will of the people on Brexit What would be unforgivable is for Labour to encourage a revolt in the Lords against the freely expressed will of the people. There is nothing stronger than when peers support the people and ask the Commons to think again, but when peers – unelected and unaccountable – go against people, that is an unsustainable position. The bill is simple in its ambition, to repeal the European Communities Act 1972 and provide legal certainty by incorporating EU law into British law and ensure there are no gaps in UK legislation. In discussions, the government may well want to consider some detailed points for example on the regime on secondary legislation or Henry VIII clauses. However any real attempt to comprehensively amend the bill will be seen for what it is – a final assault to stop Brexit in the face of a freely expressed view from voters. That is not what the Lords is for. – Lord Strathclyde for The Times (£) > Revealed on BrexitCentral: Lord Adonis’ “poisonous” plot to ambush EU Withdrawal Bill in the Lords Charlie Elphicke: How to ensure the UK is ready to become a powerhouse of global trade We must fully leave the EU, its Single Market and its Customs Union. Why? Because only then can we take back control of our laws, our borders, our money and our trade policy – and take full advantage of the opportunities that Brexit brings… The vote to leave the EU was a vote for change. A belief that Britain can do better. It is through global trade that we will drive our economy forwards. And by getting it right by making sure we don’t overpay the EU, the promises made during the referendum can be fulfilled – especially spending at least an additional £100 million a week on the NHS. It is by making good on these promises and trading with the world as a whole that we will reignite a belief in our future. About the kind of nation we can build. And about turning doubters into believers – even the EU-funded CBI. – Charlie Elphicke MP for ConservativeHome Brexit comment in brief The Conservatives can’t rely on Brexit to win them the next election – Lord Ashcroft on ConservativeHome Our focus on Brexit must not leave City blind to opportunities in Asia – Catherine McGuiness for the Telegraph (£) A very British Président – Nabila Ramdani for CapX I regret the pain I’ve caused my family and Ukip, the party I serve – Henry Bolton for the Telegraph (£) There’s still life in Ukip, but for the party’s sake Henry, please go! – Suzanne Evans for The Times (£) Brexit news in brief May meets Trump today: PM to strengthen post-Brexit special relationship with US in Davos – Express No deportations for EU citizens even with No-Deal Brexit, Davis says – Bloomberg Brexit costs £200m every week in lost growth, claims BoE Governor Mark Carney – The Times (£) Merkel and Macron warn against perils of digital imperialism – Telegraph (£) Tory backbench boss Sir Graham Brady begs angry MPs not to call leadership contest – The Sun