ANALYSIS

Theresa May’s speech offers clarity on the UK’s Brexit negotiating strategy in some important areas – the UK will pursue a ‘hard Brexit’, with seemingly no prospect of the UK accepting free movement of EU citizens or remaining in the single market.

However, the speech does not provide complete clarity on Brexit objectives or what the Government’s red lines will be during the negotiations with the EU.

These details are unlikely to be revealed until later in the year at the earliest, after the UK has given the EU formal notification of its intention to leave the union and national elections in France and Germany have passed.

While the UK may succeed in achieving new trade arrangements with partners around the globe, this is likely to be complex and will require some time to establish.

Two aspects will therefore be of vital importance during the upcoming negotiations with the EU – first, arranging a phased, transitional process of change rather than a ‘cliff edge’ departure, and second, securing a free trade deal with the EU to come into effect after withdrawing from the single market.

The latter of these may be met with particularly strong resistance, as EU leaders will be reluctant to give the UK a deal that appears better than membership, fearing that other EU countries may then also decide to leave.

While the Prime Minister did not present specific details of how the UK’s economic model would change in the event of an unacceptable Brexit or if the EU is seen to be ‘punishing’the UK for leaving, it is likely that this would involve the Government cutting corporation tax and reducing business and financial regulations.

Theresa May’s speech placed emphasis on preserving the United Kingdom.

The response of the Scottish Government will be of great interest, particularly given the confirmation that the UK will leave the single market and the speech’s seeming rejection of differing economic arrangements within the UK.