The three-basket approach

Basket one

The areas of UK-EU relationship that Mrs May described as currently completely “outside the scope” of formal EU-UK trade relationship. These might include security and foreign policy, for example. “This would include everything currently outside the Single Market acquis [body of law],” the Institute of Government suggests.

Basket two

Areas where the UK and the EU seek mutual outcomes, or as Mrs May puts it, “where we share the same goals but want to achieve them through different means”. This could include environmental protection standards and some areas of financial services. “This would effectively be a form of managed mutual recognition of rules,” the Institute of Government suggests.

Basket three

The areas where the UK “wants to achieve the same goals in the same ways” because it makes sense for both sides’ economies. These areas could, for example, include chemical and medicine regulation as well as competition and state aid policy. “If the UK diverged, it would immediately lose barrier-free market access,” the Institute of Government warns.