BREXIT – Theresa May is expected to use the most important speech of her premiership to confirm that Britain will be leaving the single market while insisting that it wants to remain “the best friend” to European partners.
In remarks that critics will cite as evidence that the government is pursuing a hard Brexit, the prime minister will say there is no option that leaves Britain “half-in, half-out” as she sets out 12 key priorities for the EU negotiations.
Critically, she will insist there will be no compromise over the ability to control borders and regain sovereignty.
Speaking to an audience at Lancaster House, Westminster, including ambassadors from across the world, May will stress her ambition to reach out beyond the continent to build new trading relationships in a move that suggests the UK will also leave the customs union.
However, the prime minister is likely to restate an argument that she does not see it as an either/or choice and say that whatever final deal on trade and customs duties is struck, lorries will be able to pass through Dover and other ports unhindered, despite warnings from others on the issue.
“We seek a new and equal partnership – between an independent, self-governing, global Britain and our friends and allies in the EU. Not partial membership of the European Union, associate membership of the European Union or anything that leaves us half-in, half-out,” May is expected to say.
“We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave. The United Kingdom is leaving the European Union. My job is to get the right deal for Britain as we do.”
Advisers know the speech could have an impact on the value on sterling by confirming that the UK cannot stay in the single market, but May will say that British voters backed Brexit “with their eyes open”.
In a speech that will delight Eurosceptic backbenchers, she will avoid talking about soft or hard options, but instead promise a clean break from the EU.
The priorities include control over immigration and removing Britain from the jurisdiction of the European court of justice plus securing the rights of EU citizens in Britain, committing to retain workers’ rights, building a strong trading relationship with the EU and rest of the world, making Britain an attractive place for investors and students, and preserving the union.
May will say that these negotiating priorities will be driven by four underlying principles: “certainty and clarity; a stronger Britain; a fairer Britain; and a truly global Britain”.
The prime minister will attempt to offer a more positive vision of the situation to other European countries. “Our vote to leave the European Union was no rejection of the values we share. The decision to leave the EU represents no desire to become more distant to you, our friends and neighbours. We will continue to be reliable partners, willing allies and close friends,” she will say.
“We want to buy your goods, sell you ours, trade with you as freely as possible and work with one another to make sure we are all safer, more secure and more prosperous through continued friendship.”
May’s words, which sources say have had significant input from the foreign secretary, Boris Johnson, and Brexit secretary, David Davis, is likely to be cheered by MPs who support Brexit. Staff in Downing Street are also said to be positive about the speech, which is expected to be long and detailed.
However, many of May’s opponents, including some within the Conservative party, will despair at the lack of compromise on migration and sovereignty that will mean Britain has no choice but to leave the European single market.
Whitehall sources suggested that May had been urged to take a harder stance over Brexit by cabinet colleagues who have argued that a rerun of the referendum would result in an even more emphatic victory for Brexit, in the region of 60%-40%. They believe the fact that the predicted economic downturn has not materialised means that voters are increasingly warming to the idea of Britain’s clean break.
The Scottish National party is likely to react with anger to May’s likely decision to ignore their demands to attempt to reach a special settlement for Scotland, under which it could stay a member of the internal market while retaining free movement of Labour.
The first minister, Nicola Sturgeon, has warned that failure to heed the desires of the Scottish government, in the face of last June’s remain vote north of the border, could result in a second independence referendum.
Angus Robertson, the party’s leader in Westminster, said: “The prime minister should know that the SNP and the Scottish government are not bluffing; we are deadly serious about protecting Scotland’s place in Europe and I would expect to hear that she is taking this seriously if making keynote speech about Brexit. But I’m not holding my breath.”
Tim Farron, the Liberal Democrat leader, also hit out at May, highlighting the fact she had been photographed for Vogue magazine: “I assume they are going to change the name to Vague for this edition to match her vision of our future trading relationship with Europe.”
She could get also a critical response from Conservative backbenchers planning to tour radio and television studios on Tuesday to respond to the speech.
Meanwhile, the Swedish foreign minister, Ann Linde, told the Guardian that it was inevitable that Britain would have to leave the single market.
Speaking during a trip to the UK which included a meeting with the Brexit secretary, the Swedish politician said: “The messages I got from ministers is that there is no political possibility [to keep] free movement of people and the European court of justice. It is not possible to be in the single market if those parameters are not there.”
Linde warned that leaving the customs union was not risk free, with an official inquiry in Sweden finding that 2,000 companies said it was particularly difficult to trade with Norway, which is outside the customs union. She said that negotiations could take time, with at least 15 months for exit talks before discussions about a new trade deal after that.
But Linde insisted that she wanted the remaining member states, the EU27, to embark on “constructive negotiations” with Britain as it was in everybody’s interest. She said she hoped that May would strike a different tone on Tuesday than in a speech during last September’s Conservative party conference that
May was given an economic boost before the speech when the International Monetary Fund, which had warned during the referendum campaign of a negative impact from a Brexit vote, upgraded its outlook for the British economy this year.
The IMF said it expected the UK to grow by 1.5%, up from a previous forecast of 1.1%. However, the Washington-based institution cut its forecast for 2018, from 1.7% to 1.4%, owing to uncertainty over Britain’s “unsettled” exit terms.
Investors displayed unease on the eve of May’s speech, with the FTSE 100 index ending a record 14-day winning streak on Monday. The pound dipped below $1.20 at one point as it fell to a three-month low, reflecting concerns that the prime minister would confirm plans for a hard Brexit.
The government will present Tuesday’s speech as its plan for exiting the EU as demanded by Labour during a parliamentary vote. However, the shadow Brexit secretary, Keir Starmer, argued that a “one-off speech is not the same as a plan for Brexit”.
He argued that May’s priority should be the economy: “Having spoken to businesses, trade unions and communities across the UK, it is clear what they need to hear: that the prime minister will put jobs and the economy first, ensure companies are able to trade without tariffs or additional impediments, that there will be no watering down of key employment or environmental rights; and that we will form a new cooperative relationship with the EU.”
Rupert Harrison, former chief of staff to George Osborne at the Treasury, said he did not believe May was definitively ruling out leaving the customs union, especially in key industries.
“I think there is a possibility the UK will seek to remain in the customs union in some very important sectors where we have integrated supply chains across borders, car manufacturing and aerospace.”
Harrison, now chief macro-strategist at BlackRock said it was “very difficult to imagine how you build an Airbus aircraft without being in the customs union in some way or how some of the big car manufacturers who are shipping parts sometimes several times across borders can continue doing so without being in the customs union.”
However, prominent remain campaigners including former Lib Dem leader Nick Clegg and New Labour cabinet minister Peter Mandelson voiced dismay at the proposals in the speech. Clegg told the Guardian May was sending the signal that “the needs and aspirations and interests of 16.1m fellow citizens counts for nothing.”
Mandelson said the prime minister was trying to conceal the “difficult choices” Britain would be forced to make outside the single market and the customs union. “Customs barriers add costs and delays which would mean we lose our market share,” he told BBC Radio 4. “A hard Brexit is when financial and other services can’t access the EU market because regulators don’t accept the equivalence of the new UK regulatory regime, when staff needed to fill vacancies are not able to come here. There are no clicky fingers solutions, but not even to acknowledge that there are difficult choices that have to be made, I think is very worrying.”
The former EU trade commissioner said May had to make it “absolutely clear that the country’s interests come first, not partisan interests and she’s got to be a prime minister for the whole of the country, not just those who voted to leave”