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22 September 2017

Theresa May confirms two-year transition period and EU budget payments

May said “the UK will honour commitments we have made during the period of our membership”.

By Julia Rampen

Theresa May has confirmed the UK will uphold its budget commitments and aim for “around” two years’ of transitional arrangements in Brexit negotiations.  

Speaking in Florence, the Prime Minister said she wanted to set a tone “of partnership and friendship” and insisted it was possible to find a deal that integrated trade more deeply than the EU-Canada model, while retaining more powers than the European Economic Area one. 

The summer has seen hardline Brexiteers within the government battle with former Remainers over the question of a transitional period, and continued payments to the EU budget. In particular, two Brexiteers, backbencher Jacob Rees-Mogg and foreign secretary Boris Johnson, have been touted as possible challengers to May’s authority. 

However, May confirmed that she would be aiming for a period of implementation which would last around two years. 

She also addressed the budget question, saying: “I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave. The UK will honour commitments we have made during the period of our membership.” 

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The EU budget plan extends to 2020, meaning the UK is likely to pay at least €20bn.

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The UK was willing to pay to continue to take part “in specific policies and programmes” with mutual advantage, such as in science and security, the PM added.

May did not make any new commitments on EU nationals in the UK. The new immigration scheme could take two years to implement, and during the transition period, she suggested freedom of movement could continue, but new arrivals from the EU would have to register. 

She said: “The framework for this strictly time-limited period, which can be agreed under Article 50, would be the existing structure of EU rules and regulations. 

“How long the period is should be determined simply by how long it will take to prepare and implement the new processes and new systems that will underpin that future partnership. 

“For example, it will take time to put in place the new immigration system required to re-take control of the UK’s borders. So during the implementation period, people will continue to be able to come and live and work in the UK; but there will be a registration system – an essential preparation for the new regime.

“As of today, these considerations point to an implementation period of around two years.”

In the run up to May’s widely anticipated Florence speech, it was reported foreign secretary Boris Johnson would resign over concessions, and that he backed a Canada-style deal instead

But May said: “One way of approaching this question is to put forward a stark and unimaginative choice between two models: either something based on European Economic Area membership; or a traditional Free Trade Agreement, such as that the EU has recently negotiated with Canada.

“I don’t believe either of these options would be best for the UK or best for the European Union.”