Brexit: PM bids to break deadlock with two-year deal offer

September 21, 2017 7:57 pm0 commentsViews: 6

Theresa May will tell EU leaders there is a shared responsibility to make Brexit work “smoothly” as she attempts to break the deadlock in negotiations.

In a major speech in Florence on Friday, she will say history will judge Brexit “not for the differences we faced, but for the vision we showed”.

The BBC understands she will propose a two-year transitional deal, after March 2019, ahead of a permanent trade deal.

It could include payments worth 20bn euros over the two years.

According to pre-released excerpts from her speech, the prime minister will say that a successful final agreement is in the interests of both the UK and the remaining EU countries.

“If we can do that, then when this chapter of our European history is written, it will be remembered not for the differences we faced, but for the vision we showed; not for the challenges we endured but for the creativity we used to overcome them; not for a relationship that ended but a new partnership that began.”

She is expected to say, if the UK and EU can be “imaginative and creative” about establishing a new relationship, both sides can be “optimistic about the future”.

Mrs May will argue that it is “in all of our interests for our negotiations to succeed… so I believe 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”.


Analysis

By BBC political editor Laura Kuenssberg

Do expect Theresa May’s first admission that the UK will ask the EU for as long as two years to make our complete exit.

Two years during which we might pay billions to keep our existing ties with the single market. Two years, after 2019, that could give business breathing space.

But this could frustrate some voters who chose to leave, who may see departure now only in the distance.

Don’t expect chapter and verse on the future relationship. There is not yet a clear agreement in cabinet on its shape and style, even if the prime minister herself had a fully fleshed-out vision.

But there is hope in government circles that the offer could unblock the Brexit negotiations.

There are also expected to be additional guarantees for EU citizens that could help, before the two sides are due to sit down again for official talks next week.

Read more from Laura


The BBC understands the prime minister will make what has been described as an “open and generous” offer, potentially worth 20bn euros over the two years – which could plug a black hole in the current EU budget, which runs to 2020 – created by the UK’s departure.

Mrs May briefed her top team at a marathon two and a half hour cabinet meeting in Downing Street on Thursday on what she will say in Florence.

A government source said that the intention was to make the potential payments conditional on continued access to the single market and some form of customs union which allowed the UK to strike its own trade deals during the transition period.

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Mrs May is not expected to say exactly how much the cash offer will be worth, the exact nature of the arrangements for accessing the single market or any conditions attached to the money in her much-anticipated speech, as these are subject to the negotiations in Brussels.

Additional long-term liabilities, like EU pensions and debts, will also have to be dealt with in the talks to come, so the eventual Brexit bill is likely to be far higher than that 20bn euros (about £18bn).

The prime minister is also expected to repeat her assertion that the UK will seek its own bespoke trade deal after Brexit with the rest of the EU.


The view from Brussels

By the BBC’s Adam Fleming

Politicians and officials across the EU will listen to the tone of Theresa May’s speech but they mostly care about the content and its effect on the Brexit talks.

The UK’s offer to pay its membership fees until the end of the seven-year budget cycle is more generous than Britain’s pitch at the last round of talks but less than Michel Barnier wants.

And the media has paid little attention to the impasse over citizens rights, where the EU fears its nationals will have to go through an unacceptable administrative process to stay in the UK after Brexit.

Diplomats point out that talk is fine but the negotiations advance on concrete proposals, written down in legalistic documents.

Brussels officials are also gripped by the political situation in the UK, with one senior figure suggesting the prime minister is too weak to offer anything big and might not even be in her job in two weeks’ time.

They are open to a transition deal but the further it deviates from EU membership, the harder it will be to negotiate in the limited time available.


‘Just for starters’

Conservative MP Kwasi Kwarteng, who campaigned for Brexit, said on BBC One’s Question Time that he understood the “logic” behind a two-year transition period, when the current EU budget ran until 2020.

He acknowledged that to those who supported Brexit it was “frustrating” to have to continue paying into the EU for two years after leaving. But he said: “I think as a matter of goodwill, there is a sense in saying we will pay to the end of that budget process… and then not a penny more.”

But Lib Dem Leader Vince Cable, who was also on the panel, said: “£20bn is just for starters. It’s going to be a lot more than that – it’s an opening offer.”

In a speech to the Italian parliament on Thursday, the EU’s chief Brexit negotiator Michel Barnier said that striking a deal with the UK was “in our common interest” but he was awaiting “clear commitments” from the UK on the issue of guaranteeing EU citizens’ rights, on the financial settlement and on the Northern Ireland border.

Without those issues being resolved in a withdrawal agreement, there would be no transition deal, he said.

The fourth round of Brexit negotiations begins on 25 September, with the UK due to leave the EU in March 2019.

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