Theresa May confirmed suspicions that the UK will leave the single market after Brexit in a major speech on her objectives.
The Prime Minister said the Brexit vote was a clear message about controlling immigration, and “that is what we will deliver” – but this meant the UK could not continue following the rules of the single market
She said: I want to be clear. What I am proposing cannot mean membership of the single market. European leaders have said many times that membership means accepting the “four freedoms” of goods, capital, services and people.
“And being out of the EU but a member of the single market would mean complying with the EU’s rules and regulations that implement those freedoms, without having a vote on what those rules and regulations are.”
May also repeated that maintaining the open land border between Northern Ireland and the Republic of Ireland would be a priority, and that she wanted trade deals with the rest of the world.
But leaving the single market wasn’t the only Brexit bombshell May dropped. Here is what we learnt:
1. The single market may be replaced by a European free trade deal
The Prime Minister has ruled out a single market, but is hoping for a deal to replace it. She said: “As a priority we will pursue a bold and ambitious free trade agreement with our neighbours in Europe.”
2. No more European Court of Justice
May said Brexit will end the jurisdiction of the European Court of Justice in Britain, and that “laws will be interpreted by judges not in Luxembourg but in courts across this country”.
3. Parliament will get a vote on the Brexit deal
Most MPs already expected to get a vote – as their peers in the European Parliament would get one. May confirmed this, saying: “I can confirm today that the government will put the final deal that is agreed between the UK and the EU to a vote in both Houses of Parliament, before it comes into force..”
4. EU citizens still face uncertainty
May has always been clear she wants to confirm EU citizens’ right to remain in the UK, but only if British citizens receive the same guarantee in other EU countries.
She made no further guarantees, saying: “I have told other EU leaders that we could give people the certainty they want straight away, and reach such a deal now. Many of them favour such an agreement – one or two others do not”
5. She will try to stay in the customs union
May explicitly said the UK will have to leave the EU single market, but she was far more nuanced on the customs union, which negotiates trade deals on behalf of the EU member states.
She does not want Britain to share the EU’s common commercial policy, or be bound by common external tariffs, but does want to “have a customs agreement with the EU”. This could mean the UK becoming “an associate member of the customs union”.
6. Some payments may continue
May said that Britain voted to stop large contributions to the EU, but she stopped short of ruling them out altogether. There may be payments that are “appropriate”, she said, if there are programmes the UK wants to be part of.
7. Brexit could be in phases
The PM said several times she wanted to reassure businesses – who are increasingly unhappy about the uncertainty ahead. She wants the negotiators avoid a “cliff edge”, but also avoid “permanent political purgatory” (something Brexiteers fear).
May suggested a deal could be done by the time the two-year process of Article 50 ends, and this could be followed by a “phased process of implementation”.
It’s worth bearing in mind at this point that two years in EU deal-making time is extremely speedy.
8. The UK’s nuclear option: Corporate tax haven
The Chancellor Philip Hammond has already floated the idea that a disgruntled Britain could slash corporate tax in order to attract unscrupulous multinationals to its shores.
May said that the UK would be prepared to crash out without an agreement, saying “no deal for Britain is better than a bad deal for Britain”.
In such a situation, Britain “would have the freedom to set the competitive tax rates and embrace the policies that would attract the world’s best companies and biggest investors to Britain”. In other words, become an offshore tax haven.