A Global Britain: Giving some substance to the strategy

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Posted on January 17, 2017

Brexit. A Global Britain: Giving some substance to the strategy

British Prime Minister Theresa May, in a positive and upbeat speech in London, has now finally set out a strategy for taking the UK out of the EU. This was the first full opportunity since the June 23 referendum, for the Prime Minister to lay out what her redlines and priorities will be for the UK leaving the EU, these included:

1. The UK will leave the Single Market and the Customs Union, while seeking to negotiate replacement arrangements for both. Mrs. May understands that a red line for EU member states, is that a UK that attempts to stay in the Single Market, would have to accept free movement of EU migrants, something which the country would not have accepted;

2. The UK will control the movement of people into the UK, but will seek an early agreement as part of the negotiations to ensure the rights of EU nationals in the UK and UK nationals in the EU;

3. No associate or partial membership of the EU which would result in retaining bits of EU membership, this includes UK withdrawal from the European Court of Justice. However, the PM was clear about protecting workers rights as they currently exist in EU legislation;

4. Tariff-free trade with the EU as well as the ability for the UK to be able to agree its own bilateral trade agreements outside the EU;

5. A successful EU remains in the UK’s best interests;

6. Maintaining the open land border with Ireland;

7. A responsible but time-limited transition. The PM warned the EU that it is in no one’s interests for there to be a cliff-edge for business or a threat to stability as this process unfolds. That would not be good for Britain, nor for the EU. The UK will walk away from a bad deal;

8. Article 50 will be triggered in March with a 2 year negotiating period to follow; and

9. The UK Parliament will have the final say on the Brexit deal, likely to be concluded in time for the next UK general election in 2020.

Theresa May had been under pressure for months to give some clarity to a strategy for the UK’s Brexit talks and ultimately exit from the EU. She will have felt emboldened today, underlined by the markets response and a sterling rebound, albeit from steep losses over the last few days. She needed to fill the vacuum of the phony war in the UK over the last six months since. She will have taken comfort in statements from both President-elect Donald Trump and the New Zealand PM that they were ready to do early trade deals.

The markets were calmer too as they understood a ‘no cliff edge for business’ was said with the financial markets in mind, i.e. the City of London.

The PM also understood the need to keep Parliament involved, if only because the Government is likely to lose the High Court ruling on Parliamentary involvement when the judges pronounce later in January. She also knows that with the Parliamentary Labour party in disarray and in any case likely to ‘support the will of the people’, she believes that she will be able to get a clear break from the UK, or at least a clear timetable for any transition arrangements in time for the next UK general election in 2020. What remains unclear is what would happen if Parliament rejected the deal. The UK could be therefore in the position of leaving the EU without anything in place.

Northern Ireland is particularly problematic for her, particularly in the short term, as the power sharing Government has just collapsed with a snap election now called. Keeping a border as open as possible between Northern Ireland and Ireland (the UK’s only land border with the EU) will be tricky. This will be compounded by pressure being put by Dublin to keep trade with the UK as tariff free as possible, with some 36% of Irish exports destined for the UK. Additionally, some form of border control is accepted as being a step backwards in the peace process. The near integration of the Northern Ireland and Irish economies has been seen as a major element in keeping the peace process going.

All of this of course is now up for negotiations with the EU and member states. But it would have been near impossible for her to go into the Brexit talks without an outlined plan and the confidence of the country, from both sides of the Referendum, that she will be seeking the best for the UK. Her critics in the UK will remain. The devolved administrations, primarily Scotland will continue to press their own agenda. But her main test is of course yet to come.

Download the full transcript of Theresa May’s remarks here.

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