Bye-bye Single Market? What to expect from Theresa May’s Brexit plan
We know Brexit means Brexit, but Theresa May will finally tell the UK exactly what that means this week in the most significant speech of her premiership and setting the course for Britain's exit from the European Union.
The Prime Minister will say that the UK is prepared to leave the Single Market, customs union and the jurisdiction of the European Court of Justice, according to newspaper reports on Sunday morning, as she pushes for an end to free movement in negotiations.
The stance would formalise May's previously indicated stance that the UK will pursue a so-called hard Brexit. Reiterating hints last week that membership of the Single Market and the customs union are expendable, put pressure on sterling and sent the FTSE to new highs, with analysts predicting more of the same with May's speech due on Tuesday.
Read more: Bye-bye Single Market? What to expect from Theresa May's Brexit plan
On Friday, May met with her New Zealand counterpart, Prime Minister Bill English, where she said the two countries were ready to negotiate a trade agreement, adding another non-EU country to the list of places seeking ties with the UK. However, it will take some time for the UK to be in a position to start working on such deals.
Brexit minister David Davies insisted the government has been listening to business, which is largely against a hard Brexit.
"We have been listening to what business is saying about the need for certainty wherever it can be brought," he said, writing in the Sunday Times and hinting at some sort of transitional deal.
"That’s why, if it proves necessary, we have said we will consider time for implementation of new arrangements. Our plans to shift all EU law into UK law at the point of exit will also make the process as smooth as possible."
A transitional deal would ease Brexit fears in the City.
City lobby group TheCityUK last week called for May to secure transitional plans to clear a smooth path to Brexit. Anthony Browne, boss of the British Bankers' Association said that such arrangements would avoid a "cliff-edge" moment – something Theresa May herself has indicated she wants to avoid.
The EU's chief Brexit negotiator Michel Barnier indicated a desire for a "special" relationship with the City, according to unpublished European parliament minutes published by hte Guardian, to avoid financial instability.
Barnier took to Twitter to clarify that this would not be in the form of a "special deal to access the City", however.
When asked on equivalence I said: EU would need special vigilance on financial stability risk, not special deal to access the City @guardian
— Michel Barnier (@MichelBarnier) January 14, 2017
Meanwhile, chancellor Philip Hammond hinted that Britain could lower its corporate tax rate in response to being denied access to the European Market after Brexit.