Theresa May has asked EU countries to agree to a two-year Brexit transition during which the UK would continue to enjoy unfettered access to the single market.
The prime minister said her government would accept EU rules during that period including allowing EU citizens to live and work in Britain, accepting European laws and meeting financial obligations.
However, she insisted that such an agreement would be “strictly time-limited”, as she repeated her call at Lancaster House for European partners to offer Britain a bespoke Brexit deal that would amount to a trading relationship closer than any that currently exists with other non-EU countries.
“One way of approaching this question is to put forward a stark and unimaginative choice between two models: either something based on European Economic Area membership, or a traditional free trade agreement, such as that the EU has recently negotiated with Canada,” she said.
“I don’t believe either of these options would be best for the UK or best for the European Union.”
Downing Street made clear that any payments would stop after the transition period. May attempted to break the deadlock in negotiations by calling for a treaty to oversee a future security relationship, saying the UK was “unconditionally committed to maintaining Europe’s security”.
And she improved the offer governing European citizens living in the UK.
May argued that EEA membership would mean accepting rules without influence or votes, which would inflict a “loss of democratic control” that she said British voters would not accept.
She added that the Canada-EU deal was the most advanced that had been carried out, but added: “Compared with what exists between Britain and the EU today, it would nevertheless represent such a restriction on our mutual market access that it would benefit neither of our economies.”
The question of an EEA-style model versus that held by Canada has become a key debate between Brexiters on May’s backbenches and those fighting for a softer exit.
Some suggested that May’s speech, which comes after a week of infighting triggered by Boris Johnson’s decision to publish his own 4,200-word vision of Brexit, leant towards a closer relationship, as favoured by the Treasury and the chancellor, Philip Hammond.
However, the foreign secretary was quick to respond by telling journalists he was “very happy” with the speech, and tweeting:
May said she recognised that Brexit was a “distraction” from the work that European countries wanted to focus on, but added: “We have to get this right.”
She said that the UK would “cease to be a member of the European Union on 29 March 2019”, losing its place at the European Council table, and in the Council of Ministers, and no longer having MEPs.
“But the fact is that, at that point, neither the UK – nor the EU and its member states – will be in a position to implement smoothly many of the detailed arrangements that will underpin this new relationship we seek,” she said, claiming the EU could not legally conclude an agreement with the UK until it becomes an external partner.
She said that EU citizens arriving during the transition period would benefit from free movement, although they would be asked to register in preparation for a future immigration system. Sources pointed out that registration already exists in EU countries such as Belgium.
Jeremy Corbyn said it sounded as if the prime minister had listened to the Labour party, which has a policy of remaining within the single market and in a customs union for a limited period.
But he added: “Fifteen months after the EU referendum the government is still no clearer about what our long-term relationship with the EU will look like.”
He said Theresa May and her cabinet were “spending more time negotiating with each other rather than with the EU”, and repeated his claim that the Tories were trying to use Brexit to deregulate and cut taxes.
Charlie Elphicke – the pro-Brexit Dover MP – called it a “hugely optimistic and forward-looking speech” that set out a “powerful vision” of an outward-looking Britain.
“The prime minister’s positive tone was exactly right to set out the case for a deal where both the UK and Europe win. However it takes two sides to strike a deal. The behaviour of Brussels remains a serious concern – which is why we must be prepared for every eventuality. That means the UK must be ready on day one – deal or no deal.”
But Neil Carmichael, a fiercely pro-EU Tory who lost his seat in the 2017 general election, argued that much more work needed to be done if Britain was to enter into transition and suggested that a two-year period might not be enough.
“The business community is getting worried now. I think it needs a longer period. This is a postponement – and the continued lack of clarity on the final deal is still a big problem,” he said.
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