Theresa May has said that Britain will continue to apply the European Union’s rules for at least two years after Brexit, as she extended an olive branch to Brussels.
In her first major speech on the UK’s position on the Brexit negotiations for nine months, the prime minister said there will need to be a fixed period of time “of around two years” after the UK formally leaves in March 2019 in which “access to one another’s markets should continue on current terms”.
The acceptance of a “standstill” period is a concession to Brussels that 10 Downing Street hopes will unblock the stalled negotiations. But it will be controversial among Leave voters, as it would involve the UK effectively allowing EU citizens to come and go freely, and the UK paying significant financial contributions -- without having any say over the EU’s rules.
It did not go down well with UKIP's former leader.
The prime minister travelled to Florence, Italy for the speech, and delivered it in a small room in front of a crowd of travelling Westminster journalists. The prime minister had been expected to set out details of her government’s vision for a future relationship with the EU, but the speech was mostly notable for a striking change of tone toward Europe.
The key points were:
A transitional phase would in effect mean a prolongation of the status quo. May said: “The framework for this strictly time-limited period, which can be agreed under Article 50, would be the existing structure of EU rules and regulations”.
On the key issue of the UK’s financial commitment, which some estimates have calculated could be as high as £100 billion gross, and which has stalled talks so far, the PM hinted that she was prepared to meet the EU’s demand to settling these: “Still I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave”, adding, crucially, “The UK will honour commitments we have made during the period of our membership.” The prime minister also reaffirmed the UK's interest in contributing to some EU programmes in future.
On another exit issue, guaranteeing the rights of EU nationals in the UK, May said the UK would incorporate the exit agreement fully into UK law. She also gave a nod to EU concerns that guarantees through UK law alone could not be sufficient in future by saying “Where there is uncertainty around underlying EU law, I want the UK courts to be able to take into account the judgments of the European Court of Justice with a view to ensuring consistent interpretation.
May took a far more emollient tone toward the EU than in previous public statements. May sought to defuse some of the tensions between the two sides by praising Europe and emphasising the UK’s desire for a “hand in hand” trading and security relationship after Brexit. One Tory MP characterised her speech as telling Europe, “It’s not you, it’s me.” May also repeated proposals for a new UK-EU security treaty.
May will be hoping that her movement on these issues will allow talks to progress to negotiations about the future relationship.
But the speech didn't give the clarity on her plans for the post-Brexit relationship that many had hoped for -- and that sources in Whitehall had indicated would be included.
“She actually said nothing,” said one Tory MP.
The British Chambers of Commerce said a two-year transition period isn't enough and that it will lobby politicians on both sides to extend it to at least three years.
“The Prime Minister is still pretending we can have our cake and eat it for a long-term deal,” said Frances O’Grady, head of the TUC. “She is not levelling with British people about the trade-offs that will be needed.”
Another Tory MP, who supported Brexit, was more positive about the speech and welcomed May’s optimistic tone.
Michel Barnier, the EU’s chief Brexit negotiator, welcomed May’s “constructive spirit.” But he added: ”Prime Minister May's statements are a step forward but they must now be translated into a precise negotiating position of the UK government.”
Barnier went on to lament the fact that May's Florence address was light on providing ideas for how to avoid a hard border between the Republic of Ireland and Northern Ireland once the UK exits the EU.
“Today's speech does not clarify how the UK intends to honour its special responsibility for the consequences of its withdrawal for Ireland,” Barnier said in a written statement.
The EU’s chief Brexit negotiator also welcomed May’s request for a transition arrangement saying: “If the European Union so wishes, this new request could be taken into account by the EU and examined in light of the European Council stated in its guidelines of 29 April 2017: ‘Should a time-limited prolongation of Union acquis be considered, this would require existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply’.”
Ireland's prime minister Leo Varadkar described the speech as insufficient to move on to the next phase of Brexit talks.
Meanwhile, Barnier's words were echoed by the Italian prime minister who said May's constructive speech would now be put to the test during negotiations.
Henry Newman, director of the Eurosceptic think tank Open Europe, said the speech set out a “grown up” and “sensible” that should help the talks to progress and calm the nerves of big businesses that wanted the government to commit to a standstill transition, to avoid a catastrophic “cliff edge” when Britain leaves in March 2019.
But one corporate lobbyist said that, while the transition announcement is welcome, big companies will rethink their investments in the U.K if the government doesn't make rapid progress on the future relationship in the latest round of talks next week.
European capitals will be wanting to see the prime minister’s words turn into substance when the two negotiating sides meet in Brussels next week.
The EU and the remaining 27 member states want to achieve "sufficient progress" on all exit issues – the rights of EU nationals in the UK, settling Britain’s financial commitments, and finding a solution in Ireland – before talks can progress.
In addition to sorting out the past, knowing what the two sides will be transitioning to is an essential part to any interim implementation phase. On the future relationship, May distanced Britain both from a Canada-style trade deal, arguing that the UK and the EU could form a closer relationship given their aligned starting point, and from a Norway-style model in the single market as it would not allow May to take back control of the UK’s laws and borders.
A senior European government official told BuzzFeed News the speech was "constructive" and "struck the right notes," but "it will be essential to see the cards on the negotiating table, and how the internal debate [within the Tory party] evolves."
The UK prime minister urged the EU to seek a deep, bold and creative partnership. However, she provided little detail on how such a relationship would work in practice.
Another senior European government official said they thought May's speech was "the result of compromises to keep [different] factions [within government] on board. Nothing really new."
Elsewhere, Manfred Weber, the chair of the centre-right party in the European Parliament, which includes Angela Merkel’s Christian Democratic Union (CDU) said May’s speech didn’t bring clarity to the UK position:
Speaking in Rome on Thursday, Barnier warned that it would not be possible “to have the same benefits as the Norwegian model [in the single market] but the limited obligations of the Canadian model [a free trade agreement].”
Barnier, Davis and their teams will meet to continue negotiations on Monday.
Alex Spence is a senior political correspondent for BuzzFeed News and is based in London.
Contact Alex Spence at email@example.com.
Alberto Nardelli is Europe editor for BuzzFeed News and is based in London.
Contact Alberto Nardelli at firstname.lastname@example.org.
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