Six things we learned from Theresa May's big Brexit speech

  • Britain will remain in EU institutions beyond Brexit.
  • Time limited transition period will last around two years
  • Free movement of people from the EU will continue with modifications.
  • Payments to EU budgets will continue.

LONDON — Prime Minister Theresa May delivered her highly-anticipated keynote speech on Brexit negotiations in Florence, Italy on Friday afternoon.

It was May’s most detailed explanation yet of her government’s aims for Britain’s future relationship with the EU.

In her speech, May confirmed that she wants a transitional deal during which Britain will remain in the EU’s key institutions, ruled out replicating existing models for Britain’s post-Brexit relationship with the EU, and reassured EU citizens living in the UK that her government wants to guarantee their right to remain.

So what did we learn and what does this all actually mean for Brexit and Britain’s negotiating position?

Britain will remain in the EU beyond Brexit day

The prime minister said that her government wants to negotiate a transitional phase which will give reassurance to British businesses and ensure a “smooth and orderly” exit from the EU. May did not say how long she would like this transitional phase to last, but it will probably be 2-3 years and will take effect the day Britain drops out of the EU at the end of March 2019. Crucially, May confirmed that she wants Britain’s current relationship with the EU’s markets to “continue on current terms” during this transitional phase.

That means we’ll stay in the single market for a few more years

May’s comments all but confirmed that Britain will stay in the European single market during the transitional phase. This means she is keen to avoid the “cliff edge” Brexit dreaded by British businesses and most politicians. “Clearly people, businesses and public services should only have to plan for one set of changes in the relationship between the UK and the EU,” she said.

Britain will pay up

Britain will continue to pay into the EU for years after Brexit, May indicated. Britain’s commitments will continue for at least two years May suggested, meaning that at least some of the hole caused to EU budgets by Brexit will be filled. May hopes that this “generous offer” will help restart negotiations which have so far stalled over the level of Britain’s “divorce bill.”

Free movement will continue

Crucially, the free movement of people will almost certainly continue until beyond Brexit day. May in her speech acknowledged that the EU’s four freedoms are “indivisible” and the free movement of people is one of these freedoms. This means UK and EU citizens will be able to travel to and from Britain with the same ease which they do now until the transitional phase expires, which will likely be in 2021 or 20122. However, she suggested that those arriving from the EU would have to register upon arrival.

European judges will still have sway over the UK

If Britain does continue with its current access to EU markets beyond Brexit day then this means it will be forced to continue with the jurisdiction of the European Court of Justice (ECJ) until transitional phase comes to an end. The ECJ, based in Luxembourg, polices all matters to do with the single market and its participants and will continue to do so even after Britain leaves the EU in March 2019, under Prime Minister May’s proposals.

There will be no “Norway model”

May, as expected, ruled out Britain replicating relationships the EU has with other countries in its own post-Brexit relationship with the bloc, including the so-called “Norway model” where Britain would stay in the single market as a member of the European Economic Area (EEA). Here’s the key quote:

“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.

“I don’t believe either of these options would be best for the UK or best for the European Union.”

The prime minister repeated her desire to negotiate a “new,” “bespoke” relationship with the EU from scratch. This will be much difficult to negotiate than choosing to replicate an existing model, and will almost certainly take longer to negotiate than the 12 months or so Britain has to left to reach a deal with the EU.

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