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Theresa May's Florence speech: key points Theresa May's Florence speech: key points
(35 minutes later)
Theresa May’s third big speech on Brexit had to do two things. First, the prime minister had to give the EU enough on the main points of the stalled article 50 talks – including the vexed question of a financial settlement – to unblock them, but not so much as to antagonise the Eurosceptic hardliners in her cabinet and parliament.Theresa May’s third big speech on Brexit had to do two things. First, the prime minister had to give the EU enough on the main points of the stalled article 50 talks – including the vexed question of a financial settlement – to unblock them, but not so much as to antagonise the Eurosceptic hardliners in her cabinet and parliament.
Secondly, the EU27 wanted clarity on the UK’s plans for a transition period out of the bloc, and some indication of what workable form Britain would like the future relationship to take that does not look like a bid to keep the rights of EU and single market membership while shedding the obligations.Secondly, the EU27 wanted clarity on the UK’s plans for a transition period out of the bloc, and some indication of what workable form Britain would like the future relationship to take that does not look like a bid to keep the rights of EU and single market membership while shedding the obligations.
So how did the prime minister do?So how did the prime minister do?
MoneyMoney
As expected, the prime minister offered to pay enough into the EU to ensure that no member state would have to stump up more (or receive less) during the current budget round that ends in 2020.As expected, the prime minister offered to pay enough into the EU to ensure that no member state would have to stump up more (or receive less) during the current budget round that ends in 2020.
“I do not want our partners to fear that they will pay more or receive less,” she said. “The UK will honour commitments it has made during the period of our membership.”“I do not want our partners to fear that they will pay more or receive less,” she said. “The UK will honour commitments it has made during the period of our membership.”
This amount – she did not specify it, but it is widely believed to be around €20bn (£18bn) – could go some way towards kickstarting the divorce talks, which broke down over the financial settlement.This amount – she did not specify it, but it is widely believed to be around €20bn (£18bn) – could go some way towards kickstarting the divorce talks, which broke down over the financial settlement.
But the EU is thought to be looking for a final settlement of between €50-€100bn, so was also looking for assurances that the UK will meet its longer-term unpaid liabilities (for EU projects and other continuing items) several years beyond Brexit. But the EU is thought to be looking for a final settlement of between €50bn and €100bn, so was also looking for assurances that the UK will meet its longer-term unpaid liabilities for EU projects and commitments lasting years beyond Brexit.
This was trickier for the prime minister any promise of major transfers to the EU after 2020 would be likely to cause uproar among the hardliners. Accordingly, she was more vague on the question of future commitments. This was trickier for the prime minister. Any promise of major transfers to the EU after 2020 would be likely to cause uproar among her hardliners. Accordingly, she was vague on the question.
May said only that the UK wanted “to continue to contribute to programmes that are beneficial to the UK and the EU, such as science, education and culture, and security”, and that it would pay “a fair contribution to cover our share of the costs”. May said only that the UK wanted “to continue working together in ways that promote the long-term economic development of our continent”, including taking part and contributing “out fair share of the costs” in “specific policies and programmes ... such as science, education and culture and mutual security.”
Transition periodTransition period
May’s financial offer could now help pave the way to a transition period aimed at bridging the gap between leaving the EU in March 2019 and beginning the new trading relationship, which she confirmed should last “about two years”.May’s financial offer could now help pave the way to a transition period aimed at bridging the gap between leaving the EU in March 2019 and beginning the new trading relationship, which she confirmed should last “about two years”.
The UK and the EU would “not be able to implement smoothly” many of the new arrangements that would be necessary, she said, and “people and businesses would benefit from a period to adjust in a smooth and orderly way”.The UK and the EU would “not be able to implement smoothly” many of the new arrangements that would be necessary, she said, and “people and businesses would benefit from a period to adjust in a smooth and orderly way”.
The EU had made clear that any transition period must maintain the status quo, meaning Britain will have to abide by EU law (including accepting the jurisdiction of the European court of justice) and continue to allow free movement. The EU had made clear that any transition period must maintain the status quo, meaning Britain would have to abide by EU law (including accepting the jurisdiction of the European court of justice) and continue to allow free movement.
May accepted this, saying people and businesses “should only have to plan for one set of changes”. So during the transition period “access to one another’s markets should continue on current terms”. The framework for this “strictly time-limited period” would be “the current framework of EU regulations”, she said. May accepted this, saying people and businesses “should only have to plan for one set of changes”. So during the transition period “access to one another’s markets should continue on current terms”. The framework for this “strictly time-limited period” would be “the current structure of EU rules and regulations”, she said.
The only concrete difference would be a registration system for new arrivals from the EU. She also said aspects of the transition period could be brought forward “if this can be done smoothly”.The only concrete difference would be a registration system for new arrivals from the EU. She also said aspects of the transition period could be brought forward “if this can be done smoothly”.
This gives the chancellor, Philip Hammond, the gradual exit he has been asking for all summer to minimise the shock to British business. It should also satisfy the Brexiters, who can at least feel Britain is at last well and truly on the way out.This gives the chancellor, Philip Hammond, the gradual exit he has been asking for all summer to minimise the shock to British business. It should also satisfy the Brexiters, who can at least feel Britain is at last well and truly on the way out.
Citizens’ rights and the Irish borderCitizens’ rights and the Irish border
After a series of Home Office blunders, the EU27 were looking for strong assurances on citizens’ rights. In a significant gesture, May offered to write legal protections for EU citizens living in the UK into the exit treaty.After a series of Home Office blunders, the EU27 were looking for strong assurances on citizens’ rights. In a significant gesture, May offered to write legal protections for EU citizens living in the UK into the exit treaty.
“I want to incorporate the agreement fully into UK law, and make sure British courts can refer to it,” she said. This represents a considerable strengthening of the UK’s earlier proposals to write the agreement on citizens’ rights into UK law, meaning it could have been rewritten by MPs. “I want to incorporate the agreement fully into UK law, and make sure British courts can refer directly to it,” she said. This represents a considerable strengthening of the UK’s earlier proposals to write the agreement on citizens’ rights into UK law, meaning it could have been rewritten by MPs.
In a further concession, May said she accepted a role for the ECJ in settling citizens’ rights disputes. “I wants UK courts to be able to take into account the judgements of the European court of justice in making decisions on these matters,” she said. In a further concession, May said she accepted a role for the ECJ in settling citizens’ rights disputes. “I wants UK courts to be able to take into account the judgments of the European court of justice with a view to ensuring consistent interpretation,” she said.
But the EU had also made it clear it it expects Britain to solve the problem of the border between Northern Ireland and the Republic, and dismissed London’s proposals so far as “magical thinking”. But the EU had also made it clear it expects Britain to solve the problem of the border between Northern Ireland and the Republic, and dismissed London’s proposals so far as “magical thinking”.
It wanted substance here, and it got none. “We will protect progress made in Northern Ireland over recent years and the lives and livelihoods that depend on it,” May said, adding: “We have both stated explicitly we will not accept physical infrastructure on the border.” She made no new suggestions on how this might happen. It wanted substance here, and it got none. “We have both stated explicitly we will not accept physical infrastructure at the border,” she said but made no new suggestions on how this might happen.
Defence partnershipDefence partnership
May made a great deal of the contribution that the UK can make to European defence. She said she wanted a new treaty with the EU on security and criminal justice and was prepared to make an offering “unprecedented in its depth”, a “bold new strategic agreement”. May made a great deal of the contribution that the UK can make to European defence. She said she wanted “a bold new strategic agreement that provides a comprehensive framework for future security, law enforcement and criminal justice co-operation: a treaty between the UK and the EU.”
The United Kingdom “is unconditionally committed to maintaining Europe’s security”, she said. Although the EU27 will certainly welcome continued defence cooperation with the UK, they have made clear that they are not prepared to see it used as a bargaining chip in Brexit negotiations. Britain “is unconditionally committed to maintaining Europe’s security”, she said, and was offering a partnership “unprecedented in its breadth and depth”.
Although the EU27 will certainly welcome continued defence and security cooperation with the UK, they have repeatedly made clear that they are not prepared to see it used as a bargaining chip in Brexit negotiations.
Future relationshipFuture relationship
The EU 27 were looking for an indication of what kind of future trading relationship and single market access the UK wants, a question on which the government has refused to communicate clearly mainly because it has not agreed this itself. The EU27 were looking for an indication of what kind of future trading relationship and single market access the UK wants, a question on which the government has refused to communicate clearly mainly because it has not agreed this itself.
Broadly, the choice is between a “high-access, low control” model, remaining close to the EU in regulatory terms but at a regulatory cost, like Norway or Switzerland; this option is favoured by cabinet “realists” like Hammond and home secretary Amber Rudd. Broadly, the choice is between a “high-access, low-control” model, remaining close to the EU in regulatory terms but at a cost in sovereignty and cash like Norway or Switzerland. This option is favoured by cabinet “realists” such as Hammond and the home secretary, Amber Rudd.
The alternative is a “low-access, high-control” model giving greater freedom but fewer rewards, such as the free trade deal the EU recently struck with Canada, which is the preferred route for the clean-Brexit camp led by Boris Johnson.The alternative is a “low-access, high-control” model giving greater freedom but fewer rewards, such as the free trade deal the EU recently struck with Canada, which is the preferred route for the clean-Brexit camp led by Boris Johnson.
What the EU will not accept, as chief negotiator Michel Barnier has made clear, is the bespoke halfway house implied in phrases such as “frictionless trade” and “deep and special relationship”. In other words, Britain cannot have its cake and eat it: Norway-style big benefits cannot come at Canada-style low costs. What the EU will not accept, as its chief negotiator, Michel Barnier, has made clear, is a bespoke halfway house. In other words, Britain cannot have its cake and eat it: Norway-style big benefits cannot come at Canada-style low costs.
Unfortunately, this is what May said Britain wanted. She said the task was “to find a new framework that allows for a new economic relationship, but leaves rights and obligations in a new balance”.Unfortunately, this is what May said Britain wanted. She said the task was “to find a new framework that allows for a new economic relationship, but leaves rights and obligations in a new balance”.
She said she did not accept the “stark and unimaginative choice” between two options: “I do not believe either of these two options would be best for the UK or the EU”, she said. A Norway-style deal would not rhyme with taking back control, while a Canada-style deal “would represent a restriction on our market access”. She said she did not accept the “stark and unimaginative choice” between two options. “I do not believe either of these two options would be best for the UK or the EU,” she said. A Norway-style deal would represent “a loss of democratic control”, while a Canada-style deal would be “a restriction on our market access”.
She renewed the UK’s call on the EU to be “imaginative and creative” in helping design a “new and ambitious economic partnership”.She renewed the UK’s call on the EU to be “imaginative and creative” in helping design a “new and ambitious economic partnership”.
May did, however, make one significant concession on future trade, accepting that “regulatory issues are crucial” and “we need strong and appropriate dispute mechanism,” which meant “neither the ECJ nor indeed UK courts can be the arbiter of disputes”. May did, however, make one significant concession on future trade, accepting that “regulatory issues are crucial” and “we need strong and appropriate dispute mechanism”, which meant “neither the ECJ nor indeed UK courts can be the arbiter of disputes”.