Theresa May will set out plans today for a multispeed transition from the European Union in which sectors of the economy will leave at different times to avoid a cliff-edge Brexit.
The prime minister will indicate in a speech in Florence that she is prepared to pay tens of billions of pounds to Brussels and observe its rules for at least two years after Brexit.
Though she will not name a figure, her remarks will be taken as a commitment to maintain Britain’s EU budget contributions, at a cost of at least £20 billion over the period.
Mrs May has kept her cabinet together, however, by renewing promises that Britain will not automatically mirror EU legislation after it leaves the single market and customs union by the end of 2021.
Last week Boris Johnson, the foreign secretary, launched a pre-emptive strike against what he believed were moves towards a “soft Brexit” in which Britain would commit itself to being “rule-takers” and paying the EU for preferential access to its markets.
Advertisement
Having retreated from the brink of resignation, Mr Johnson will be at Mrs May’s side today with Philip Hammond, the chancellor, and David Davis, the Brexit secretary, as she seeks to convince other EU leaders to unlock stalled negotiations.
Mr Hammond has won a commitment to a flexible transition period of about two years that will allow sectors of the economy to adapt to Brexit at different speeds.
Mrs May will stress that the staggered “implementation period” is time-limited. It is understood she will set a broad deadline of about two years after the completion of formal talks in March 2019.
With cash the biggest obstacle to progress, Mrs May will table what amounts to an opening offer on the divorce bill in her speech, promising that none of the remaining 27 countries will lose out in the current budget cycle.
She will also give ground on citizens’ rights, the other key sticking area. She is expected to offer to make the withdrawal treaty legally binding on UK courts, and allow them to take European Court of Justice case law into account when settling disputes. This is designed to address concerns in Europe that the British parliament could diminish these rights in future.
Advertisement
Appealing to EU leaders to show “creativity and imagination”, Mrs May will say that further delay damages both sides in the negotiation.
“While the UK’s departure from the EU is inevitably a difficult process, it is in all of our interests for our negotiations to succeed,” she will tell an invited audience of Italian business leaders in the church of Santa Maria Novella in Florence this afternoon.
“We share a profound sense of responsibility to make this change work smoothly and sensibly, not just for people today but for the next generation who will inherit the world we leave them.”
Allies conceded last night that Mrs May’s reassurances about Britain’s continuing budget contributions would not immediately unlock the talks, which are due to begin again next week.
Michel Barnier, the EU’s chief negotiator promised yesterday to listen attentively and constructively. “A rapid agreement on the conditions of the UK’s orderly withdrawal, and a transition period, is possible,” he said. He called for Britain to “settle the accounts — no more, no less”.
Advertisement
Questions about Britain’s liabilities beyond the EU’s budget cycle — which could add at least another £10 billion to the final bill — will be left unanswered in Mrs May’s speech today, setting up the next stage of the fight over cash.
A senior Conservative MP, who was briefed on the speech yesterday, said that Mrs May would offer leaders a pledge that Britain would retain “regulatory parity” with the EU for the period of any transition deal during which a future trade arrangement was to be negotiated.
This would mean Britain effectively adopting many EU directives into British law even after it had left the bloc.
However, Mrs May would not sign up to any deal in which the UK remained “rule-takers” from Brussels, a decision that appears to rule out the so-called Norwegian and Swiss models of co-operation.
Another Eurosceptic Conservative who was consulted by Downing Street said that he expected to be “seven and a half out of ten happy”.
Advertisement
He added: “The key thing is that it will restate the point that we are not looking for a deal by which we semi-remain in the EU. It will make clear that we’re leaving and that an implementation period is an implementation period to leave — not to stay in through the back door.”