Theresa May today conceded that Britain would have to accept EU free movement and stay in the single market for at least two years after Brexit to stop businesses facing a cliff-edge departure from the union.
In a major speech in Florence, the Prime Minister committed to a full-blooded transition period after Article 50 negotiations finish in March 2019 – rejecting counsel from hard Brexiteers who want an immediate clean break.
In a victory for less Eurosceptic figures in her Cabinet such as Chancellor Philip Hammond, Ms May said free movement would continue under EU rules for the duration of the period – though immigrants would have to sign up to a new Belgian-style migration register, which is permitted by existing EU rules.
The PM reiterated her intention to secure a bespoke long-term deal for the UK, rejecting a claim by EU chief negotiator Michel Barnier that Britain would have to choose between a looser Canada-style negotiation agreement or tightly integrated Norway-style deal.
Speaking at the Santa Maria Novella complex in central Florence – a sometime church and police barracks whose environs were recently renovated with EU development funds – Ms May said that a “a period of implementation would be in our mutual interest”.
She told her 150-strong audience, composed of the British press pack, Italian business figures and a small number of local and British dignitaries, that staying in the single market temporarily would be the best way to guarantee “smooth and orderly” transition. A two-year transition would mean free movement and single market access continuing for five years after the 2016 Brexit referendum.
“Clearly people, businesses and public services should only have to plan for one set of changes in the relationship between the UK and the EU,” she said.
“So during the implementation period access to one another’s markets should continue on current terms and Britain also should continue to take part in existing security measures. And I know businesses, in particular, would welcome the certainty this would provide.
“The framework for this strictly time-limited period, which can be agreed under Article 50, would be the existing structure of EU rules and regulations.”
Ms May also left the door open to a transition longer than two years by saying the period should be “determined simply by how long it will take to prepare” processes and systems that will underpin a future partnership.