Meet us half way on Brexit, May urges EU

The Prime Minister stuck to her guns in Mansion House speech as she paved way for Brexit compromise

THERESA MAY said that the time to face the “hard facts” of Brexit had come as she told Leavers, Remainers and the EU they must all be prepared to compromise.

In her most pragmatic Brexit speech to date, the Prime Minister said she would give ground to achieve a deal, but only if Brussels accepted that in the coming negotiations “neither of us can have exactly what we want”.

Mrs May set out fresh details of how Britain’s “fair and open” future trading relationship with the EU would work, including on the crucial question of how to avoid a hard border in Northern Ireland.

In a bold message to the leaders of the other 27 EU countries, she said: “We know what we want, we understand your principles, we have a shared interest in getting this right – so let’s get on with it.”

Her speech at Mansion House in London – moved from its original location of Newcastle because of the snow – was broadly welcomed in Brussels, Belfast, and on both sides of the Brexit divide in Parliament.

Boris Johnson, the Foreign Secretary and architect of the Leave campaign, hailed it as a “convincing vision of our future partnership with the EU”.

Saying she wanted to be “straight with people”, Mrs May said British access to EU markets would be “less than it is now” because the EU could not be expected to give the UK “all the benefits without all of the obligations”.

But she said Brussels had some hard facts of its own to accept. The Euro- pean Commission’s suggestion that Britain would have to accept an “offthe-shelf ” trade deal was incompatible with its admission that none of its current trading relationships would work for the UK, hence a bespoke trade deal would have to be agreed.

Striking an overwhelmingly optimistic tone, Mrs May said: “I am in no doubt that whatever agreement we reach with the EU, our future is bright.”

Jacob Rees-mogg, chairman of an influential group of Conservative MPS championing Brexit, praised Mrs May for her “strong and clear” message which delivered on the key pledges of taking back control of laws, money and borders.

Fellow Conservative MP Nicky Morgan, one of the leading voices among Remainers, welcomed the tone of “realism and compromise”, and added that the EU “cannot say now it doesn’t know what the UK wants”.

Michel Barnier, the EU chief negotiator, said the speech provided “clarity” on the UK’S position and a recognition that there would be “trade-offs”.

On the issue of avoiding a hard border in Northern Ireland without staying in the customs union, Mrs May said only the largest 20 per cent of transactions would need to be covered by “trusted trader” arrangements, with the remaining 80 per cent being exempt from customs checks.

Meanwhile Ruth Davidson, the Scottish Conservatives leader, denounced senior male Tories jostling to replace Mrs May as “wee boys” and said criticism of the Prime Minister was “more pronounced” because she was a woman.

COMPROMISE was the recurring theme of Theresa May’s Mansion House speech, which strove to unite businesses and her warring Cabinet with a Brexit strategy that would “build a better future for our people”.

“This is a negotiation and neither can have exactly what we want,” she said.

The Prime Minister held firm in her plan to leave the single market and customs union. She gave no ground to Tory Remainers, who want the country to tether itself to Brussels with a partial customs union, as this would “not be compatible with a meaningful independent trade policy”.

“Neither Leave nor Remain voters would want that,” she warned.

Encouragingly, this did not spark public fury among Tory rebels and anti-brexit MPS: Anna Soubry praised the Prime Minister’s “honest and conciliatory” speech.

Mrs May offered similar “hard facts” for Brexiteers, making clear that even after leaving the EU – and the jurisdiction of the European Court of Justice (ECJ) – its decisions “will continue to affect us”.

The UK would still be leaving the single market, but she warned that it meant “life is going to be different” in terms of how much access Britain will have to EU markets, and vice versa.

Brexiteers took that message on well, with Boris Johnson, the Foreign Secretary, praising her “clear and convincing vision for our future partnership with the EU”.

Lord Lamont, a fellow Brexit backer and former chancellor, told The Daily

Telegraph that it was a “coherent ambitious but realistic view”.

Eurosceptics were delighted that Mrs May turned the tables on her European counterparts, inviting them to confront their own hard truths and reciprocate her pragmatic approach. “We know what we want. We understand your principles. We have a shared interest in getting this right. Let’s get on with it,” she declared.

The Irish question

Mrs May set out fresh details of how the border issue in Northern Ireland could work without the need for the province to remain part of a customs union.

She said 80 per cent of goods – those traded by small and medium-sized businesses – would be exempt from customs checks at the Irish border, with the remaining 20 per cent dealt with under “trusted trader” arrangements.

Earlier this week, the European Commission’s draft Brexit treaty outraged the British government by suggesting that Northern Ireland should follow EU rules after Brexit to avoid such a border.

But Mrs May was firm. She acknowledged the complexities of the border conundrum, but rigorously rejected any solution which would lead to trade barriers between Northern Ireland and the rest of the UK, as this would undermine Britain’s internal market.

“Just as it would be unacceptable to go back to a hard border between Northern Ireland and Ireland, it would also be unacceptable to break up the United Kingdom’s own common market by creating a customs and regulatory border down the Irish Sea,” she said.

Mrs May insisted on trade being “as frictionless as possible” via creative technological solutions so vehicles can cross the border with minimal delay.

“Some of the ideas depend on technology, robust systems to ensure trust and confidence, as well as goodwill,” she conceded, “but they are serious and merit consideration by all sides.”

Dublin will also have been relieved by Mrs May’s admission that it was “not good enough” for the UK to simply drop border controls on the island of Ireland, and leave EU officials to police it themselves. But one Irish MP said Mrs May’s proposed solution – a “mutual recognition of standards” – would not be enough to prevent any physical infrastructure, such as cameras, from appearing on the 310-mile crossing.

“The speech is welcomed and the tone must be acknowledged as positive,” said Neale Richmond, an MP for Ireland’s ruling Fine Gael party.

“However, there is still a lack of specific details that need to be worked out,” he told The Telegraph.

Mrs May’s strategy was praised by the Democratic Unionist Party (DUP), which is propping up her administration in the House of Commons.

Nigel Dodds, the DUP’S leader in Westminster, welcomed her “sensible approach of how no hard border can work”, acknowledging that these solutions were “in the papers the government produced last August as she (and we) have been saying all along.”

Trade, customs and goods

Mrs May set out her desire for the UK and the EU to continue having “good access to each other’s markets”, but warned that “it has to be on fair terms”.

She called for “binding commitments” to be made by both sides to ensure “fair and open competition” between firms. Such agreements, she said, are “part and parcel of any trade agreement”, adding: “Why would any country enter into a privileged economic partnership without any means of redress if the other party engaged in anti-competitive practices?”

European leaders have routinely dismissed her stance as tantamount to “cherry picking”, but Mrs May stuck to her guns. “If this is cherry picking, then every trade arrangement is cherry picking,” she said. “Cherry picking would be if we were to seek a deal where our rights and obligations were not held in balance. I have been categorically clear that is not what we are going to do.”

Michel Barnier, the EU’S chief Brexit negotiator, has previously indicated that he only saw two models for a future relationship: Canada or Norway.

But Mrs May made clear that she found neither acceptable, saying that the Norway model “would mean having to implement new EU legislation automatically and in its entirety” while Canada “would mean a significant reduction in access to each other’s markets”.

But, in a move that may irk pro-free trade Brexiteers such as Liam Fox, Mrs May conceded that a Brexit deal that prevented the UK from lowering regulatory standards would be acceptable.

This, she said, was because “there is no serious political constituency in the UK” that would support a “race to the bottom” on standards.

Free movement

The Prime Minister is under intense pressure to reassure Leave voters that free movement will end after Brexit. This is because many feel strongly that mass immigration has affected working standards across the UK.

Mrs May said: “We are clear that as we leave the EU, free movement will come to an end and we will control the number of people who come to live in our country.” She cited this as another reason why the UK could not adopt the “Norway model”, which would demand free movement.

Mrs May acknowledged that ending free movement did not mean British citizens could no longer live and work in the EU. By the same token, EU workers would still be able to come to the UK, but only under the terms of an immigration policy set the British government.

Services

Britain’s financial services industry risks being hit harder by Brexit than any other industry, and Mrs May took pains to reassure traders and bankers. However, she admitted that the UK will lose passporting rights, which allow the City to offer its services to all member states with no regulatory barriers.

“We are not looking for passporting because we understand this is intrinsic to the single market, of which we would no longer be a member. It would also require us to be subject to a single rule book, over which we would have no say,” Mrs May said.

She also warned the EU that any deal that was not favourable to financial services would hurt both sides.

That tone was warmly welcomed by Miles Celic, the chief executive of Thecityuk. He said: “The Prime Minister set out an ambitious and pragmatic vision for a mutually beneficial relationship between the UK and the EU.”

‘We know what we want. We understand your principles. We have a shared interest in getting this right’

‘Free movement will come to an end and we will control the number of people who come to live in our country’