PHILIP Hammond has signalled a long transition period after Brexit which experts believe will limit Scottish economic damage and make a second independence referendum easier.

The Chancellor on Friday claimed there was a “broad acceptance” in Cabinet for Britain to keep EU trading and other trading arrangements place until as late as 2022.

His remarks suggest he is winning an internal Tory dispute about just how ‘hard’ and just how fast the UK will depart from the European Union, its single market and customs union.

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Scottish business groups, who have feared losing unfettered access to migrant labour and export markets as early as 2019, immediately voiced relief.

Mr Hammond, a former Remainer, said told BBC radio he could “envisage” a situation immediately following Britain’s departure “with many arrangements remaining very similar to how they were the day before we exited the European Union”.

He added: “But over time, those arrangements moving steadily with the introduction of new processes and systems until we get to the new end state, the new normal, that will be our long-term relationship with the European Union.”

Brexit watcher Kirsty Hughes of the Scottish Centre on European Relations, said a long transition period once again raised the prospect of a relatively straight-forward re-entry to the European Union an independent Scotland.

Dr Hughes said a bespoke deal with the UK essentially staying in the single market for three years and avoiding changes to current rules, such as the common fisheries policy, would remove hurdles to an independent Scottish EU membership under First Minister Nicola Sturgeon’s now delayed second referendum timetable.

SNP MEP Alyn Smith did not take much comfort from Mr Hammon’s remarks.

He said: “Scotland’s best future is to remain in the EU and there will, I’m sure, be many more bends in the road to get there.

“The only thing that is clear, now, is that there is no plan within the Tories, the party who signed sealed and delivered the Brexit shambles and show no sign of any serious desire to make sense of it.”

Business groups have been lobbying for more time to adjust to Brexit. Stuart Mackinnon, external affairs manager for the Federation of Small Businesses in Scotland, said: “A long transitional phase – ideally lasting three years or more – would have many advantages for Scottish smaller firms.

“It would give businesses time to adapt to any new systems, and, importantly, allow government to ensure that any new rules didn’t hamper the economy.”

Professor Sir Anton Muscatelli, the economist and principal of Glasgow University, said: “If a transitional deal is in essence the status quo in terms of membership of the single market and the customs union, then this would be the best that is achievable in the Brexit negotiations.”

He added: “If it were in place for a sufficiently long period of time after 2019, say five years, it would allow a pause for reflection on the economic damage Brexit could cause.

“Personally I think that in the longer term EEA membership with the UK staying within the single market is the only form of Brexit which would be the least damaging to the UK and Scottish economy (unless Brexit itself is reversed in the 2022 General Election). This would of course involve accepting freedom of movement.”

Stuart Mackinnon, external affairs manager for the FSB in Scotland, said: “A long transitional phase – ideally lasting three years or more – would have many advantages for Scottish smaller firms.

“It would give businesses time to adapt to any new systems, and, importantly, allow government to ensure that any new rules didn’t hamper the economy.”