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I would abandon Brexit talks rather than agree to 'punitive' deal, PM says


Theresa May does not want an outcome which leaves the UK "half-in, half-out" of the European Union

Theresa May does not want an outcome which leaves the UK "half-in, half-out" of the European Union

Theresa May does not want an outcome which leaves the UK "half-in, half-out" of the European Union

Theresa May has warned fellow EU nations she is ready to walk away from Brexit talks rather than accept a "punitive" deal.

In a speech setting out her 12 key objectives for EU withdrawal, Mrs May announced Britain will leave the European single market but will seek a "bold and ambitious" free trade agreement to allow it to continue doing business with its 27 former partners without having to pay "huge sums" into EU budgets.

Mrs May confirmed she wants to take Britain out of the jurisdiction of the European Court of Justice and restore control over immigration.

She gave her strongest hint yet that the UK could leave the European customs union (CU), stating she wanted to ensure "frictionless" cross-border trade but had an "open mind" on whether that should be done through associate membership or a completely new customs agreement.

She announced MPs and peers will be given a vote on the final deal reached with the EU in Article 50 talks, due to be triggered by the end of March.

Brexit Secretary David Davis later told the Commons the vote would not be an opportunity for MPs to prevent withdrawal, as defeat for the Government would not mean Britain staying in the EU, but leaving without a deal.

Mrs May said she was "confident" a trade deal and a new strategic partnership between the UK and the EU can be achieved within the two-year deadline set out in Article 50, insisting a good deal for Britain will also be good for Europe.

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She warned: "I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path.

"T hat would be an act of calamitous self-harm for the countries of Europe. And it would not be the act of a friend."

Declaring that "no deal for Britain is better than a bad deal for Britain", Mrs May repeated Chancellor Philip Hammond's warning that if Europe refused easy access to the single market, the UK could "change the basis of (its) economic model" - effectively becoming a low-tax, low-regulation haven like Singapore off the shore of Europe, competing for business and investment with its former partners.

Mrs May said her plan would create "a truly global Britain ... a great, global trading nation that is respected around the world and strong, confident and united at home".

Labour leader Jeremy Corbyn warned she would turn the UK into a "low corporate taxation, bargain basement economy" if the EU did not give her everything she wanted.

Liberal Democrat leader Tim Farron said: "Theresa May has confirmed Britain is heading for a hard Brexit.

"She claimed people voted to Leave the single market. They didn't. She has made the choice to do massive damage to the British economy."

The markets reacted positively to the PM's speech, with the pound rising almost 3% to about 1.24 US dollars after slumping below 1.20 on Monday as speculation grew the UK would be leaving the single market.

CBI director-general Carolyn Fairbairn said businesses would welcome the clarity offered by Mrs May.

She warned that ruling out membership of the single market had "reduced options for maintaining a barrier-free trading relationship" and said companies would be "concerned about falling back on damaging World Trade Organisation rules" if the UK crashed out of the EU without a deal.

European Council president Donald Tusk said the remaining 27 members now had a "more realistic" view of Britain's goals and were "united and ready to negotiate".

Germany foreign minister Frank‑Walter Steinmeier welcomed "a bit more clarity about Britain's plans" and said it was "good" Mrs May was seeking a positive and constructive partnership.

The EU's chief Brexit negotiator Michel Barnier said an agreement on orderly withdrawal was a "prerequisite for future partnership", adding: "My priority is to get the right deal for EU27."

Some MEPs were more forthright, with German Green Jan Philipp Albrecht saying Mrs May's message was "Go f*** yourself EU but please don't let us down" while Belgian socialist Kathleen Van Brempt tweeted: "The European Union is not a menu where the UK can freely pick and choose to their liking."

Mrs May spoke to Mr Tusk and European Commission president Jean-Claude Juncker as well as German Chancellor Angela Merkel and French President Francois Hollande in the hours after the speech.

A Downing Street spokesman said: " President Juncker and President Tusk both welcomed the greater clarity in the UK's position and President Tusk said he looked forward to negotiating in a spirit of good will once the UK had triggered Article 50.

"The Prime Minister also spoke to Chancellor Merkel of Germany, and then President Hollande of France.

"She told both that the UK wanted the EU to thrive, understood the importance of the 'four freedoms' of the single market and that the UK would not be seeking membership of the single market.

"Chancellor Merkel and President Hollande both welcomed the Prime Minister's commitment to the continuing strength of the EU and her intention to negotiate a new partnership with the EU when it leaves."

Addressing an audience including diplomats from around the world at Lancaster House - the venue for Margaret Thatcher's speech arguing for single-market membership in 1988 - Mrs May said she expected "compromises" on both sides during the two-year Brexit negotiation.

She said she was committed to 12 goals, including immigration controls, free trade with European markets and the freedom to strike deals with nations outside the EU.

"We do not seek membership of the single market," she said.

"Instead we seek the greatest possible access to it through a new, comprehensive, bold and ambitious free trade agreement."

The PM rejected calls for a "transitional deal" until a full-scale trade agreement can be struck, warning this could end in a "permanent political purgatory".

She said implementation of the deal should be phased to deliver a "smooth and orderly Brexit".

Ukip leader Paul Nuttall rated the PM's plan "seven out of 10", saying it "sounded like a Ukip conference speech".