Britain will quit the European Union’s single market when it exits the bloc, Prime Minister Theresa May said on Tuesday, in a decisive speech that quashed speculation she would seek a compromise deal to stay inside the world’s biggest trading bloc.
Setting out a vision that could chart Britain’s future for generations, May answered criticism that she has been coy about her plans with a direct pitch for a clean break, widely known in Britain as a “hard Brexit”.
May promised to seek the greatest possible access to European markets. But she also said Britain would aim to establish its own free trade deals with countries far beyond Europe, and to impose limits on immigration from the continent.
May also said the final exit deal would be put to parliament for a vote – though it won’t be binding.
Asked in Parliament later in the day what the vote would mean, Brexit minister David Davis said even a rejection by MPs won’t stop the deal.
“The referendum last year set in motion a circumstance where the UK is going to leave the European Union, and it won’t change that.”
For the first time, May acknowledged that her planned measures would require withdrawing from the market of 500 million people.
“I want to be clear: What I am proposing cannot mean membership of the single market,” May told an audience of foreign diplomats and Britain’s own Brexit negotiating team at a mansion house in London.
“Instead we seek the greatest possible access to it through a new comprehensive, bold and ambitious free trade agreement. That agreement may take in elements of current single market arrangements in certain areas,” May said.
Markets rallied during her speech, with the sterling 2.5 percent against the dollar, the biggest rise since December 2008
However, the Brexit talks, expected to be one of the most complicated negotiations in post-World War Two European history, between Britain and the EU will decide the fate of her premiership, the United Kingdom and possibly the future shape of the European Union itself.
WHAT HAPPENS NEXT?
Britain will trigger the formal Brexit talks by the end of March, ushering in a two-year period of talks. May said she wanted the terms of Britain’s exit to be agreed within those two years, with new rules implemented gradually where necessary.
“It is in no one’s interests for there to be a cliff-edge for business or a threat to stability, as we change from our existing relationship to a new partnership with the EU,” May said.
“We will seek to avoid a disruptive cliff-edge, and we will do everything we can to phase in the new arrangements we require as Britain and the EU move towards our new partnership.”
Britons’ vote to leave the bloc has opened a huge number of questions about immigration, the future rights of the many EU citizens already living in the United Kingdom, whether exporters will keep tariff-free access to the single European market and British-based banks will be able to serve continental clients.
May also said she’s looking forward to Britain pursuing its own trade deals. May has previously indicated New Zealand would be at, or near, the front of the queue, once the Brexit process was complete.
May said she would not adopt models already used by other countries that have free trade agreements with the bloc, a clear rejection of arrangements seen as templates for a hypothetical “soft Brexit”.
Norway, for example, is outside the EU but a member of the wider European Economic Area, giving it access to the single market but subjecting it to many EU rules.
She outlined 12 negotiating priorities, including limiting immigration, exiting jurisdiction of the European Court of Justice, and ending full membership of the customs union that sets external tariffs for goods imported into the bloc.
Full membership in the customs union prevented Britain making its own trade deals, May said, but she still wanted a deal to keep trade with Europe as “frictionless as possible”.
NO DEAL BETTER THAN BAD DEAL
May delivered the most important address of her half year in power at Lancaster House, a stately government-owned mansion in central London where former Prime Minister Margaret Thatcher, set out British support for the single market in 1988.
Setting a firm tone for negotiations, May announced that Britain would exit the EU with no trade deal at all if it was not satisfied with what was on offer. “No deal for Britain is better than a bad deal for Britain,” May said.
She also hinted that Britain could use tax breaks as a way to fight back to keep businesses, if the EU insisted on punitive tariffs: Britain would have the freedom to set competitive tax rates to attract global companies and investors, she said.
German Foreign Minister Frank-Walter Steinmeier welcomed May’s speech but said that negotiations could only begin when Britain gave formal notification under Article 50 of the EU’s Lisbon Treaty.
The British Supreme Court is due to rule this month on whether May can trigger Article 50 without approval from parliament.
Her speech comes as Northern Ireland, the part of the UK most exposed to Brexit due to its land border with the Irish Republic, faces political paralysis after the collapse of a government that shared power between Catholics and Protestants.
One of May’s principles was “strengthening the union”, she said, adding she hoped for a spirit of unity in Northern Ireland.
May also faces difficulty winning support in Scotland, where voters strongly favoured staying in the EU just two years after they rejected independence from Britain.
US President-elect Donald Trump has said that Brexit will turn out to be a great thing and other countries would follow Britain out of the European Union. He promised to strike a swift bilateral trade deal with the United Kingdom.
May mentioned Trump, saying that it was clear Britain was now at “the front of the line” for a trade deal with the United States.
Outgoing President Barack Obama had urged Britain to stay in the EU, warning before the referendum that outside the bloc it would be at the “back of the queue” for a trade deal.
WHAT MAY WANTS IN BREXIT
May has set out four “principles” that will guide her approach to Britain’s withdrawal from the European Union, and defined 12 negotiating objectives.
CERTAINTY AND CLARITY:
* Providing certainty for business and the public sector whenever possible as negotiations take place
A STRONGER BRITAIN
* Taking back control of British law, ending jurisdiction of European Court of Justice
* Strengthening the union between the four nations of the United Kingdom
* Maintaining the common travel area between Ireland and the UK
A FAIRER BRITAIN:
* Controlling immigration to Britain from Europe
* Guaranteeing rights of EU citizens already living in Britain and rights of British nationals living in the EU as early as possible
* Ensure workers’ rights are fully protected and maintained
A GLOBAL BRITAIN:
* Pursuing a new, bold, comprehensive and ambitious free trade agreement with the EU with greatest possible access to the single market, without membership of it. Pursuing customs deal with the EU to ensure cross-border trade with Europe is as “frictionless as possible”
* Pursuing new trade agreements with the rest of the world
* Remaining a top destination for science, research and innovation
* Reaching practical arrangements with the EU for cooperation on law enforcement, terrorism, foreign affairs, foreign and defence policy
* Phased implementation approach delivering a smooth and orderly Brexit, seeking to ‘avoid a cliff edge’ disruption.