Britain could be in Brexit transition for longer than two years, Hilary Benn tells Business Insider.

Brexit committee chair says the list of issues to be resolved is "enormous" and might not be settled by March 2021.

Benn says consequences of Theresa May's Brexit lines will dawn "very, very quickly" as soon as second phase talks get underway.

The former Cabinet minister revealed he wants Corbyn to back staying in the customs union.

LONDON — Britain is unlikely to be in a position to leave the EU institutions by 2021 and must prepare to extend the Brexit transition beyond the two years already planned, the chair of the Brexit select committee Hilary Benn has told Business Insider.

The former Labour Cabinet minister said the "enormous" list of issues that need to be negotiated, meant that Theresa May was unlikely to be able to fully remove Britain from the EU by the end of her planned two year transition period.

"The government maintains that they think the whole of this negotiation will be tied up between now and the end of the Article 50 period. I haven't met a single person who thinks that's even remotely possible," he said.

"It raises a big question. What happens if at the end of the transitional period, this negotiation hasn't been completed? My answer is to prolong the transition.

"My view is that the transitional agreement ought to include provisions for an extension if necessary. I think that would be a prudent thing to do."

Corbyn must change position on Brexit

Benn, who in 2016 was chosen by MPs to head Parliament's Brexit committee, also told BI that Labour must shift to a softer Brexit policy by committing to keeping Britain in the customs union.

The MP for Leeds Central and former shadow foreign secretary to Jeremy Corbyn called on the Labour leader to pledge to keep Britain inside permanently after Brexit.

"My own personal view — not the select committee's view as we haven't taken a decision— is that the Labour should move on the customs union and say it wants to remain in a customs union with the EU," he said.

Labour's shadow Brexit team is currently committed to keeping Britain inside the customs union during a transition period but has not gone as far as saying it wants to remain inside on a permanent basis.

"The truth is, I don't see trade deals with other countries coming along any time soon," Benn said.

"Trade deal negotiations are highly complicated and take a long time. Therefore, the risk of not getting the deal with our largest single market is considerable. That's why I argue we should stay in the customs union."

He added: "You will have seen the very significant speech made by Caroline Fairbairn of the CBI.

"That was a watershed moment. On behalf of our biggest industry organisation, she put it very clearly, the benefits of remaining in the customs union outweigh any benefits of negotiating trade deals with the rest of the world."

No second referendum

In a wide-ranging interview with BI, Benn, who served in Cabinet roles under former prime ministers Tony Blair and Gordon Brown, revealed he doesn't believe a campaign to stay in the EU would win a second referendum.

I'm not convinced that another referendum would produce a different result.

The prospect of a second vote has been talked up in recent weeks after former UKIP leader Nigel Farage said his "mind is changing" on the issue as a second referendum could "kill off" the argument for good.

Benn described himself as a "passionate Remainer" but admitted: "I'm not convinced that another referendum would produce a different result. I don't see that happening."

However, he stressed no aspect of Britain's exit from the EU was off the negotiating table.

"All of the things we have been discussing are up for negotiation. These things are not bound or predetermined by the referendum result," he said.

Reality of Brexit will dawn "very, very quickly"

Reflecting on his time so far as Brexit committee chair, Benn said he was still baffled by the government's "extraordinary" decision to commit to leaving the customs union without first assessing the impact of doing so.

He also expressed his concern over the possible return of a hard border to Northern Ireland, and described the government's Brexit red lines as incompatible with avoiding a physical border between Ireland and the UK.

"The government says it wants Canada plus plus plus — whatever that means. But all trade deals, including CETA, involved border checks," he explained.

"When we went to Armagh as a committee, we saw that there is just nothing there, but three years ago there were watchtowers, army bases and police posts. What I took away from what was one very simple thought: there cannot be any going back.

"Frankly, if the government really is committed to leaving the single market and customs union, I just don't see how you can reconcile it."

The Irish border dilemma and other problems caused by May's decision to immediately rule out the single market and customs union will dawn on the prime minister "very, very quickly" once second phase talks get underway, Benn added.

"The government took a decision to say we are going to leave the single market and customs union, and have nothing to do with the ECJ. We are now coming to the point where the consequences of those decisions will become very evident," he said.

"The EU has made it very clear that for frictionless trade and no tariffs on goods there is a mechanism for achieving that, but there are consequences. There are trade-offs that will have to happen.

"I'm afraid so far the impression has been given that the UK will be able to get a deep and special bespoke partnership that will give us all the things we want but none of the things we don't want. It doesn't work like that."

Looking ahead to 2018, Benn predicted the next stage of talks will be significantly more difficult than the first.

"2018 is going to be the crucial year," he said.

"Although the phase one agreement was reached, we still don't know in detail what the UK government is seeking.

"Representatives from Europe often say they'd like to know what the UK is going to be asking for. I think the government urgently now needs to set that out."

He continued: "The future of our trading relationship in goods; what's going to happen to access to the single market for services; how will we work together on foreign policy, defence and security; the sharing of information to fight terrorism; the European Arrest Warrant; our place in Europol; our position on membership of numerous EU agencies; data transfer.

"It's a very long list."

Despite May's wafer-thin majority and shaky position in 10 Downing Street, Benn didn't believe another early general election awaited the nation.

"Not anytime soon," he told BI.

"I'd like to see one. I'm really keen to see a Labour government because there are many things to be done, not least pursuing a sensible Brexit and not one that damages our economy and jobs.

"But I don't think we are going to see one."