Britain sets aim for ‘hard Brexit’
May says UK to leave single market • Sterling rise biggest since 2008
LONDON (Reuters) – Britain will quit the European Union’s single market when it exits the bloc, Prime Minister Theresa May said on Tuesday, in a decisive speech that quashed speculation she would seek a compromise deal to stay inside the world’s biggest trading bloc.
Setting out a vision that could chart Britain’s future for generations, May answered criticism that she has been coy about her plans with a direct pitch for a clean break, widely known in Britain as a “hard Brexit.”
May promised to seek the greatest possible access to European markets. But she also said Britain would aim to establish its own free trade deals with countries far beyond Europe, and to impose limits on immigration from the continent.
For the first time, she acknowledged that those measures would require withdrawing from the market of 500 million people.
“I want to be clear: What I am proposing cannot mean membership of the single market,” May told an audience of foreign diplomats and Britain’s own Brexit negotiating team at a mansion house in London.
“Instead we seek the greatest possible access to it through a new comprehensive, bold and ambitious free trade agreement. That agreement may take in elements of current single market arrangements in certain areas,” May said.
Since May was catapulted into the premiership after Britain voted to leave the EU last June, she has refused to spell out precisely what arrangement she would seek.
That left the country speculating on whether she would opt for a “soft Brexit” that would retain benefits of membership in return for keeping Britain still subject to some EU rules, or pursue a cleaner break. Businesses complained of uncertainty.
The media had been briefed on some of the points in May’s speech since Sunday, and the expectation she would call for a sharp break had caused the pound to fall on currency markets from the start of this week.
However, markets rallied during her speech itself, especially when she made a new announcement that parliament would be given a vote on the final terms of Britain’s exit, seen as a steadying influence. Sterling rose 2.9% against the dollar, the biggest rise since December 2008
The Brexit talks, expected to be one of the most complicated negotiations in post-World War II European history, will decide the fate of her premiership, the United Kingdom and possibly the future shape of the European Union itself.
For months May has weathered criticism that she has been too silent about her plans, arguing that giving too much detail would weaken Britain’s negotiating stance.
May said she would not adopt models already used by other countries that have free trade agreements with the bloc, a clear rejection of arrangements seen as templates for a hypothetical “soft Brexit.” Norway, for example, is outside the EU but a member of the wider European Economic Area, giving it access to the single market but subjecting it to many EU rules.
She outlined 12 negotiating priorities, including limiting immigration, exiting jurisdiction of the European Court of Justice, and ending full membership of the customs union that sets external tariffs for goods imported into the bloc.
Full membership in the customs union prevented Britain making its own trade deals, May said, but she still wanted a deal to keep trade with Europe as “frictionless as possible.”
Britain will trigger the formal Brexit talks by the end of March, ushering in a two-year period of talks. May said she wanted the terms of Britain’s exit to be agreed within those two years, with new rules implemented gradually where necessary.
She also hinted that Britain could use tax breaks as a way to fight back to keep businesses, if the EU insisted on punitive tariffs: Britain would have the freedom to set competitive tax rates to attract global companies and investors, she said.