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20th of July 2018

Economy



Theresa May unveils plans for softer Brexit

Prime minister Theresa May on Thursday unveiled her proposals for the UK’s future relationship with the EU in a Brexit white paper that sets out plans for an “association agreement” of the kind recently agreed between Brussels and Ukraine.

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.

The 98-page document is meant to accelerate negotiations in Brussels so as to clinch a Brexit deal in the autumn. Mrs May said she wants talks to move “at pace”.

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”.

“I have been reading a lot about Brexit over the last couple of days and it seems to be turning a little bit differently where they are getting at least partially involved back with the European Union,” he said, before flying to London to begin a three-day visit to the UK.

Meanwhile, the new Brexit secretary Dominic Raab dismissed complaints by Conservatives MPs about the soft Brexit plan thrashed out by the cabinet last Friday at Chequers, Mrs May’s country residence.

Mr Raab, who succeeded David Davis after he resigned over the plan on Sunday, urged colleagues to abandon any attempts at “parliamentary riots and sabotage”. Boris Johnson, who quit as foreign secretary on Monday in protest at the plan, is now plotting his next move from the Tory backbenches.

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.

Michel Barnier, the EU’s chief Brexit negotiator, has previously warned Britain that it cannot seek single market-style access for goods while excluding itself from equivalent arrangements on services and the free movement of people.

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.

The white paper represents the opening negotiating bid by Mrs May on talks about a “future partnership” between the UK and EU, which is due to feature as a non-binding political declaration alongside the expected Brexit withdrawal treaty.

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Monday, 9 July, 2018

Talks on the future relationship will only begin in earnest after Britain leaves the EU in March 2019 and becomes a “third country”.

The pro-Brexit European Research Group, which counts about 60 Tory MPs among its supporters, has warned that the white paper is the latest manifestation of what it calls “Brexit in name only”.

Jacob Rees-Mogg, head of the ERG, said: “This is the greatest vassalage since King John paid homage to Philip II at Le Goulet in 1200. This white paper has not needed age to turn yellow.”

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