12 July 2018

Financial Times: Theresa May unveils plans for softer Brexit

The white paper, which this week sparked the resignation of two Eurosceptic cabinet ministers, confirms that Mrs May is moving towards a softer form of Brexit, with Britain aiming to retain close economic ties with the EU. [...]

While some European leaders have given a polite but guarded welcome to the proposals, the expectation in Brussels — and among Tory Eurosceptics — is that Mrs May will have to make more concessions to meet EU demands.

Speaking at the Nato summit in Brussels on Thursday, US president Donald Trump said the UK was taking “a little bit of a different route”, adding “I don’t know if that’s what they voted for”. [...]

The white paper, which is based on the Chequers deal, creates the framework for what Whitehall officials expect Brussels will call an “association agreement”— the type of deal struck by the EU with third countries including Ukraine and Georgia, and providing them with “privileged links” to the bloc.

The document confirms that Britain would seek a “free trade area” with the EU for goods, coupled with a complex plan to keep Britain inside the bloc’s customs territory, to avoid “any friction at the border”, including Ireland.

But the white paper also sets out proposals for a looser relationship between the UK and the EU on services, which represent 80 per cent of the British economy. This includes financial services, led by the City of London.

The white paper says Britain would seek the “freedom to chart its own path” on services, but acknowledges that with regulatory autonomy would come a significant problem. “There will be more barriers to the UK’s access to the EU market than is the case today,” it adds. [...]

Other key features of the white paper include:

• A hint of a generous British approach to EU migration. The white paper says that tourists and people travelling for “temporary business activity” would be free to come to the UK without a visa.
• Confirmation that the government’s “facilitated customs arrangement” plan between the UK and the EU would be “phased in”. Officials said there could be a delay of 12 to 18 months after the end of the Brexit transition period in December 2020.
• A four-page section detailing proposals for a new “economic and regulatory agreement” on financial services. This ditches Mrs May’s former plan for a system based on the concept of mutual recognition, where the UK and EU would have recognised each other’s rules covering banks, fund management groups and insurance companies.
• Confirmation that Britain would seek membership of EU agencies covering aviation, chemicals and medicines.
• Details of how a new UK-EU trade and security agreement would be enforced by a joint arrangement, under which rulings by the European Court of Justice would be taken into account.

Full article on Financial Times (subscription required)

White Paper

Financial Times analysis: Theresa May ditches hopes of keeping City in tight tie-up with EU

Reactions:

David Davis on Financial Times: Britain must be able to control all regulations after Brexit

Bloomberg: May's Northern Irish ally says Brexit plan respects its red line

TheCityUK responds to the government’s Brexit White Paper

The City of London Corporation's comment

AFME statement

ACCA statement

CBI: Business has responded to the UK Government's Brexit White Paper

Bruegel: A Brexit deal is still not achieved

Open Europe: The Brexit White Paper offers a compromise approach for negotiations, but seems to have little support in Parliament

Labourist Keir Starmer on The Mirror: Keir Starmer: Labour will never support Theresa May's flawed Brexit blueprint

Related article on BBC: Brexit vote: Government defeats EU customs union bid

Related on ITV News: Sir John Major: May faces more 'hardline' rebels over Europe than I ever did - and they could spark an autumn election

© Financial Times