In her first major speech outlining London’s plan for shepherding the UK out of the European Union, British Prime Minister Theresa May laid out a vision for a cleaner break from Europe than many Brexit critics had hoped for.
May said the UK would be leaving the European single market, the system that ensures freedom of movement, goods, services, and capital among all members of the regional bloc. She called for the UK to withdraw partially or entirely from the EU customs union, an agreement in which all members agree to a common tariff, or border tax, on all goods being imported into the group. She said the UK would decrease its contributions to EU coffers. And she confirmed that it would limit the number of EU citizens coming into Britain.
"The message from the public before and during the referendum campaign was clear: Brexit must mean control of the number of people who come to Britain from Europe. And that is what we will deliver,” May said during a speech at Lancaster House in London on Tuesday.
May’s language was widely interpreted as indication of a so-called “hard Brexit,” which basically means that the UK exits the single market and regains full control over its own borders, laws, and trade deals. By contrast, a so-called “soft Brexit,” which was the preferred choice of people who wanted the UK to remain in the EU, would’ve entailed an attempt to retain single market membership through a special arrangement that would’ve involved embracing its "four freedoms" of movement of goods, services, people, and capital. It could’ve also involved being subject to some EU laws.
But given that a soft Brexit would effectively mimic much of what it was like to be in the EU in the first place, a hard Brexit is more in line with the political sentiment expressed during the referendum.
The UK’s economy didn’t plummet after the Brexit vote, as many economists had forecast, but the pound took an enormous plunge, and there are plenty of reasons for the country to be concerned in the long run about the effects of trade barriers between the UK and Europe.
It’s important to note that the UK doesn’t have a strong negotiating position here — it needs the EU’s market much more than the EU needs it; Europe is the biggest market for British goods that are exported abroad. And the EU has good reason to be tough in negotiating new trade agreements with the UK to make sure that other members don’t try to leave the alliance while still retaining the perks of membership like the elimination of tariffs.
“Should it become apparent that you can get full access to the single market even if you can choose certain things, then we risk that every country cherry picks,” German Chancellor Angela Merkel said in a speech on Monday.
May’s speech was the second major blow to the EU in less than two days. On Monday, Donald Trump used a joint interview with two of Europe’s biggest newspapers to predict that the EU would fall apart and make clear that the US wouldn’t really care if it did.
“The EU was formed, partially, to beat the United States on trade, OK?” he asked rhetorically during the interview with the Times of London and Germany’s Bild newspaper. “I don’t really care whether it’s separate or together.”
Within Britain, May’s remarks delighted those who had supported Brexit and angered many of those who had opposed it.
Brexit architect Nigel Farage, the former leader of the UK Independence Party and a close friend of Donald Trump (who had rankled many in London by urging May to make Farage ambassador to the US), couldn’t have been happier:
I can hardly believe that the PM is now using the phrases and words that I've been mocked for using for years. Real progress.— Nigel Farage (@Nigel_Farage) January 17, 2017
Those who do care about the future stability of the EU, by contrast, were dismayed by May’s remarks. Nick Clegg, the former Liberal Democrat leader who advocated for the UK to remain in the alliance, deemed May’s speech “a kick in the teeth for our youth.” He said the British prime minister was “siding with Trump and against Merkel,” and warned that her language increased the chance of a “disorderly” withdrawal from the bloc.
May described her hope to renegotiate the UK’s trade relationship with the EU to allow for the “freest possible trade.” But ultimately she said the UK would be ready to leave without an exit agreement: "No deal for Britain is better than a bad deal for Britain," she said. Official Brexit negotiations are expected to begin in March, and the UK is expected to formally leave the EU in 2019.
May confirmed that both houses of Parliament would get to vote on a final Brexit deal. The fact that some lawmakers who favor a close relationship with the EU would get to sign off on the deal seems to make it more likely that their goal of staying as close to Europe as possible could make its way into any agreement (perhaps in the form of things like minimal deviation from the EU customs union or better access to the single market) — although it’s unclear what would happen if Parliament ended up rejecting it altogether. The possibility that anti-Brexit MPs will get to have more of a say in the final outcome made the value of the pound rise sharply during the speech.
Britain may not get much. If the UK pulled off withdrawing from the burdens of being in the EU while still reaping the special benefits associated with membership, then it would encourage other nations discontent with the EU to do the same, ending the EU as we know it. That might be fine with Trump, but it’s certainly not okay with Merkel. Britain may wind up as a symbol of a post-EU Europe, but likely not in the way Brexit supporters would have wanted.