On 29 March 2017, the U.K.’s Prime Minister, Theresa May, formally began the Brexit process by giving notice pursuant to Article 50 of the Treaty on European Union of the U.K.’s intention to withdraw from the EU. Since then, the parties have held three rounds of negotiations. Frustration has been expressed in some quarters by the pace of these negotiations and a perceived lack of clarity of the U.K. government’s ultimate goals for Brexit.

Against this backdrop, on 22 September 2017, Mrs May delivered her third speech on Brexit from Florence, with the apparent goal of providing greater clarity and reassurance in key areas of uncertainty. A full transcript of the speech is available here.

Mrs May framed her speech with reference to "shared European interests and values" and noted a desire for the U.K. to remain the EU’s "strongest friend and partner as the EU, and the U.K. thrive side by side."

Mrs May then went on to set out her government’s view on key areas of the negotiations.

Implementation Period

The Prime Minster confirmed the U.K. will seek a transition period, or, in her words an "implementation period", set to last "around two years". This implementation period aims to avoid the so-called "cliff-edge" Brexit, which some predicted would cause considerable damage to the British economy. The EU has made clear that any transition period would have to be on existing terms, which would mean free movement remaining in place, and the continued jurisdiction of the European Court of Justice. Mrs May appeared to accept this, but noted "there will be a registration system" for Europeans coming to live or work in the U.K., which she described as "an essential preparation for the new regime."

An implementation period is not an uncontentious proposition. Unsurprisingly, Nigel Farage MEP, the former leader of the United Kingdom Independence Party, and one of the key architects of Brexit, had previously suggested "this is not what we voted for, we voted to leave not transitional arrangements." Indeed, even among Mrs May’s cabinet colleagues whether there should be an implementation period, and, if so, of what length, was a matter of some debate. For its part, the British Chamber of Commerce has suggested a transition period of "at least three years."

Mrs May’s approach appears to have been a compromise between the various conflicting proposals, and is likely to be welcomed by the U.K.’s business community.

Financial Settlement

The settlement of the U.K.’s financial liabilities to the EU (the so-called "divorce bill") has been a particular source of consternation. In an effort to secure the implementation period, Mrs May made clear that "The U.K. will honour commitments we have made during the period of our membership." While the Prime Minister did not propose a concrete figure, she suggested "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."

This will give some reassurance to Michel Barnier, the EU’s chief negotiator, whose demands for financial settlement have to-date met with fierce opposition from David Davis, his U.K. counterpart. However, it is not clear whether Mrs May’s intervention will satisfy Mr Barnier that the U.K. is prepared to settle the full extent of the liabilities he has identified, reportedly somewhere in the region of €50-100 billion.

Protection for EU Citizens

Since Mrs May invoked Article 50, the EU has been looking for reassurance that its citizens already living and working in the U.K. will continue to enjoy the same rights post Brexit.

The Prime Minister emphasized that "one of my first goals in this negotiation is to ensure that you can carry on living your lives as before." With this in mind, she added: "I know there are concerns that over time the rights of EU citizens in the U.K. and U.K. citizens overseas will diverge. I want to incorporate our agreement fully into U.K. law and make sure the U.K. courts can refer directly to it."

However, this was not the end of the story, Mrs May added: "Where there is uncertainty around underlying EU law, I want the U.K. courts to be able to take into account the judgments of the European Court of Justice with a view to ensuring consistent interpretation." The EU had previously insisted that the ECJ oversee the rights of its three million citizens living and working in the U.K. The U.K. rejected this outright: removal of the U.K. from the jurisdiction of the ECJ had been one of Mrs May’s "red lines" in the negotiations.

By ensuring EU citizens can enforce their rights in U.K. courts, which will continue to take into account ECJ jurisprudence, Mrs May will be hoping to satisfy the EU that its citizens will have sufficient recourse in the U.K., and, as such, further direct ECJ oversight will not be necessary.

Conclusion

The U.K.’s negotiating team has come under criticism for lack of clarity, and, indeed, members of Mrs May’s government have made numerous interventions in the U.K. press, projecting the image of an administration which, at best, lacks a unity of purpose. In particular, an article by Foreign Secretary, Boris Johnson, published only a week before the Prime Minister’s Florence speech was seen by many as an attempt to dissuade Mrs May from the softer Brexit favoured by, among others, her Chancellor Philip Hammond. There has been considerable speculation that, under normal circumstances, Mr Johnson’s intervention would have resulted in his losing his cabinet position. As it is, Mrs May is leading a minority government, without the political capital to respond decisively to such distractions. She has subsequently made the comment that she does not want to be surrounded by "yes men" and thus, for now Mr Johnson’s position seems to be safe and at the recent Conservative Party conference, Mr Johnson stated that he supports "every syllable" of Mrs May’s Florence speech.

In the face of her party’s lack of cohesion over Brexit, Mrs May has set out the basis of her own vision, and has called on the EU to approach the Brexit negotiations with a view to finding "imaginative and creative" solutions. Mr Barnier has called the speech "a step forward", but will be looking for concrete proposals as the next round of formal negotiations get underway.