In a speech today, Prime Minister Theresa May set out the UK Government’s objectives in negotiating the United Kingdom’s departure from the European Union.
The Prime Minister made clear that the United Kingdom will leave the EU Single Market as continued membership would be incompatible with two consistently articulated priorities of the Government, first that the United Kingdom should have control over immigration, and secondly that it should cease to be subject to the jurisdiction of the European Court of Justice.
She explained that the Government will seek a “strategic partnership” conferring the “greatest possible access” to the Single Market through a “new, comprehensive, bold and ambitious” free trade agreement (FTA) providing for the freest possible trade in goods and services between the United Kingdom and the European Union, on a reciprocal basis.
The Government will also seek a customs agreement with the European Union, providing for “tariff-free and frictionless” trade. This might entail some form of associate membership of the EU Customs Union, or the United Kingdom being a signatory to some elements of it. What mattered was not the means but the end. The Government wishes to remove as many barriers as possible to trade, and for the United Kingdom to establish its own tariff schedules at the World Trade Organisation.
The United Kingdom will welcome agreements to collaborate on major science initiatives, and will wish to continue to co-operate in relation to important areas such as crime, terrorism and foreign affairs.
Other priorities included maintaining the Common Travel Area with Ireland, and protecting the rights of EU nationals in Britain and British nationals in the European Union. In relation to the protection of workers’ rights, the Prime Minister committed to building on the existing rights that exist under EU law.
The Prime Minster stated that she wished the United Kingdom to have agreed on its future partnership with the European Union within two years from activation of the withdrawal procedure under Article 50 of the EU Treaty. However, she acknowledged that some form of transitional arrangements may be necessary, in the form of a phased process of implementation of the new regime, and that different periods might apply for different sectors. When the European Communities Act 1972 is repealed, the existing body of EU law will be converted into UK law, and the UK Parliament will be able to decide in due course on any changes to that law.
The Prime Minister said that she is seeking a “smooth and orderly” Brexit. She emphasised that the government will “provide certainty wherever we can”, but that it would not be pressured to say more than she believes is appropriate in the context of a sensitive and crucial negotiation. She confirmed that the Government would put the final deal that is agreed between the United Kingdom and the European Union to a vote in both Houses of Parliament before it comes into force.
She made clear that, whilst she is confident that a mutually acceptable deal can be achieved, the United Kingdom would not accept being punished for leaving the European Union, and that “no deal is better than a bad deal for Britain”. Reiterating recent comments by the Chancellor of the Exchequer, the Prime Minister reiterated that Britain would have the ability to set competitive tax rates and to “change the basis of Britain’s economic model” in response to a “punitive deal” that would constitute “an act of calamitous self-harm for the countries of Europe”.
The Prime Minister’s speech provides welcome additional clarity as to the UK Government’s objectives once it enters the Article 50 negotiation process, but much will also depend on the approach adopted by the other EU Member States. A great deal remains uncertain, and businesses will need to continue to plan for a range of eventualities, relating in particular to the content of any FTA with the European Union; the terms of any customs agreement; the nature of the United Kingdom’s future trading relationships with non-EU countries; and the details and duration of any transitional agreements. There is a long way to go before the present “fog in the channel” lifts.