this is bbc news. i'm christian fraser live in florence where the prime minister is preparing to deliver her keynote speech about britain's departure from the eu. she is expected to propose a two year transition deal, costing £18 billion — which it's hoped will break the deadlock in negotiations. we want things to move on to the next stage. we want to see a proper basis established for trade and security. so we know we want to things to move forward and well. the prime minister's speech is expected to start in the next few minutes, we'll bring it to you live and get analysis on how it's received across europe and at home. i'm ben brown, the other stories this hour: an 18—year—old man has been charged with attempted murder following the attack at parsons green station last friday. the taxi app uber won't have its licence renewed in the capital. transport for london says the firm isn't fit and proper to operate.

uber says it will appeal. good afternoon and welcome to bbc news. theresa may is preparing to deliver her long awaited speech in florence about the gplans for brexit. the prime minister will say the uk and the european union have a responsibility to make brexit work and she's expected to offer continued payments to the eu during a two year transition period after britain leaves. ministers hope this will break the deadlock with negotiators in brussels — although there's speculation that it could cost britain £18 billion. let's cross live now to christian fraser in florence. welcome to florence, looking

glorious in the sunshine. this is a moment in history and some say it is the most important speech theresa may has delivered on brexit and this is is the perfect setting. the charm offensive has begun, the prime minister told jean—claude juncker some of the detail of the speech. but i'm told it was still being written last night. she also spoke to the irish taoiseach. the british know they need to carry key allies within the british council. some of the ex—pats in florence are out. these are people who didn't get a vote in the referendum and they feel they were denied their vote. not a particularly large group, but quite noisy. our correspondent ben wright

has been looking at the speech. the time to negotiate britain's exit from the eu is disappearing fast. we will be out by march 2019, and talks seem stuck. that's why theresa may is here in florence, to set out in more detail her view of how britain and the eu will work together and trade together after brexit. the government is impatient for the talks to move on. what we think is necessary is for the talks to not only encompassed the things that have been discussed so far, like the rights of citizens, the irish border, but if we're going to things we've already been talking about, we've actually got to resolve what the future trading relationship is going to be, what our future trading relationship is going to be and what theresa may is doing today is setting out her ambition for that relationship. theresa may is expected to say the uk is keen to have a new trade relationship with the eu after 2021, but for the first time she is expected

to say the uk wants a transition deal, keeping as far as possible the trade relationship we already have with the eu for two years. that means costs and conditions and it's thought the government is ready to pay up to £18 billion to the eu during this transition period. there's been a long—running argument within the cabinet this speech. are you disappointing britain will be shelling out 20 million to the eu? leave supporting tory mps seem on board with the uk making payments to the eu for a limited time but not everyone is happy about a transition deal. it's been a good day for goldman sachs, a good day for the giant multinationals, but it's a giant two fingers up to the 17.4 million people who listened to those arguments and said we are leaving. no ifs, no buts. cash is key to the negotiations going on in brussels and the eu is adamant it won't talk about its future relationship with the uk until progress has been made on this issue of westminster settling its

accounts, and if the uk does want a transition deal that pretty much keep the status quo in place they are going to have to be trade—offs. the divisions of the referendum have followed theresa may to florence and one question today is how candid the prime minister will be about how she thinks the transition arrangement will work. if the government wants a two your transition, they are going to have to accept the rules of the european union and that means freedom of movement, continuing to pay contributions. if they are not willing to get that then there is an going to be a transition and we will crash out and that brutal choice is simply being avoided and it's going to have to be faced. if theresa may's speech is going to help move negotiations on, the eu will want clarity and candour about the uk's plans, notjust warm words. ben wright, bbc news, westminster. the prime minister is already here. we have seen pictures of her driving into the venue in a posh—looking

car. i wonder what was going on when the british embassy were told that the british embassy were told that the prime minister was coming here. they probably said, find us a room for the prime minister. i understand this room was formerly a bris barracks —— police barracks. in the front row will be her key ministers who haven't been getting on together so who haven't been getting on together so well. philip hammond is here and borisjohnson. so well. philip hammond is here and boris johnson. let's speak so well. philip hammond is here and borisjohnson. let's speak to our political editor norman smith. a lot written about it, what do you think make of what you're hearing. is it really the most important speech she has delivered on brexit. it's right up has delivered on brexit. it's right up there. on it probably hinges whether the talks make any progress 01’ whether the talks make any progress or they carry on in this crab—like

fashion and more time is wasted. why thatis fashion and more time is wasted. why that is critical, we heard from michele barnier saying we are stuck and there is only a year left to get through the divorce proceedings and move on to the trade agreement. if there is no break through as a result of theresa may's speech today, the danger time just slips away and we end up with no deal. that is something theresa may has not ruled out. it is not the preferred option, but it would ring alarm bells in the business community in britain if that was to be the outcome. that is why there has been a transition period suggested to try and smooth things out for business. if there was a cliff edge no deal outcome, that would have huge ramifications for british business and we don't know what the consequences would be in terms of trade, tariffs those sort

of critical issues. you have brought a lively audience with you! that is worth saying, if you want to know what the most emotive issue around brexit, it is the rights of eu nationals and theresa may's people say that is one of the issues she will touch on today. whether she has enough to say on it again is another unknown. they have not briefed out in advance any of the specific proposals on what they might do. but it is suggested they might incorporate in a future brexit treaty the rights of eu nationals. but its worth saying that david davis has already suggested that and it has not been sufficient. so theresa may will have to offer more than that. a lot offure means i spoke to —— of the europeans i spoke to today, they said, we don't like brexit, because we don't know what it means for our travel to the uk.

let's cross the leeds. this is the first time the prime minister has said we might be in transition. we can said we might be in transition. we ca n ci’oss said we might be in transition. we can cross to robert hall in leeds at a stock brokers. . yes were in the the heart of leeds business area. i don't know if this speech is an appointment to view across the world, but it is being watched by the business community. nick, is there an airof the business community. nick, is there an air of expectation and a desire to see something different from this? yes, people hope it is a watershed moment. the progress from this? yes, people hope it is a water shed moment. the progress has been insufficient and individuals and businesses will be hoping for

clarity on many of the important points. what particularly, the question of transition, which now looks likely, is that going to be something that, this is the soft brexit a lot of businesses were hoping for? i think based on the sort of information that's come out and perhaps been leaked from downing street, there is an expectation that there will be, some indication of a softer brexit. and the eu leaders and negotiators will be looking for information coming out of speech on the important points, such as the rights of eu citizens who are living in the uk. the brexit bill and any information about how the border between northern ireland and the republic of ireland will be handled. you wizzed off to see how the markets are looking. has there been any movement as a result of what appears to be coming this afternoon?

looking at the currencies this morning, the pound weakened slightly. from around lunchtime the currencies, the currency has strengthened against the dollar and the euro. so i think any sort of reaction that we might see in the market do you see something currencies. do you see something dramatic or something muted, at least to start with? well, i think asi least to start with? well, i think as i said, those companies earning revenues in non—sterling currencies will be the most affected if there isa will be the most affected if there is a significant movement in the pound like we saw after the lancaster house speech injanuary, when various details were disclosed. is there division within business about hard and soft, or is there a majority on either side of that division of that debate. many

businesses would like to she a softer brexit for the reasons i said, it makes their decision—making easier if they know how things will look in two years time. thank you. that is the tvs 755.215 e55: %‘£1=13 fe—tgtpziféf iéi “2 755.215 eee: %‘£é§ eeeripe-eee* ee-i “e will 755.215 eee: e6333 eeeepeeeee eee “e will be 75:53»; eee e‘ea33 eeevepeeeee eee ee will be to the turned we back to you, iieiie;e. eeee l. a“. tiélzii'éfii,. 3 .. 3 . . you. iieiie;e. eeee 13 a“. tiélzii'éfii,. 3 .. 3 . . you. norman, iieiie;e. eeee 13 a“. tiél!’3i';:il§,. 3 .. 3 . . you. norman, some of the thank you. norman, some of the details in the speech. we will hear something about the financial settle m e nt something about the financial settlement and a bit about a transition for the first time. people are saying, we don't know much about the end destination and thatis much about the end destination and that is the crux. i doubt you will get much more than we have heard in that mrs may will reiterate her idea ofa that mrs may will reiterate her idea of a bespoke british deal. the difficulties with that is frankly thatis difficulties with that is frankly that is opened to all sorts of interpretations and options. there

is nothing specific. in part, that is nothing specific. in part, that is because mrs may cannot be any more specific, because if she were to say, you know, we want a deal a bit like canada, that would alarm people like the chancellor and amber rudd, who are wary about that that might mean in terms of trade access f she were to say, perhaps we ought to look at something like switzerland or norway, that will alarm people like borisjohnson and the breck brexiteers. they would say thatis the breck brexiteers. they would say that is europe light. that is what has been called constructive ambiguity. she can't be specific on it. at the moment, they're trying to get through this process week—by—week and for now, that means getting the talks started again, getting the talks started again, getting agreement on transition and hopefully getting agreement on cash. that would be a result in itself.

never mind the absolutely hugely daunting question of where is this all going to end up. because that exposes profound tensions within the cabinet and the conservative party. i understand it was a lively cabinet meeting, all saw it for the first timea meeting, all saw it for the first time a first reading. they had half an hourto time a first reading. they had half an hour to read it and put forward suggestions. we got an insight into some of the ideas, michael gove, he is sanguine about the cash, but he wa nts is sanguine about the cash, but he wants different sectors to go at different speeds. that that was the initial proposal in mrs may's lancaster house speech that, there would be different phases for different sectors and agriculture might do it in a year, the financial sector in two years. that now seems to have been put to one side, because the chancellor has won the argument that business basically just wants one arrangement. it doesn't want different arrangements

all over the place. his argument is all over the place. his argument is a status quo transition, so that means nothing changes. we leave, but we pretty much carry on as we are, because the alternative is too difficult to arrange in this very short time frame a? it increases the uncertainty and the upheaval for business, who are going to have to deal with with the final deal. so we are set on a steady, one—size—fits—all transition, that is very close to life as we know it. looking at the screen, the journalists starting to ta ke screen, the journalists starting to take their seats. most of the audience is the british media. 0ur kevin connelly is in there. talking about michele barnier who was talking yesterday. he talks about trust. we will probably get a response from him this afternoon. but he is ruling out a bespeak deal. he said it is norway or canada,

which do you want? there is no way of getting away from if fact that the eu is wary of the possibility that britain could emerge with a deal that makes other eu countries think, crikey, that looks good. there is a nervousness about in any way providing a route which seems to almost reward britain for leaving the eu. so i think they are deeply, deeply suspicious of giving britain a special deal. that gives us pretty good access to the single market, but not a lot of burdens and that is why mr barnier is damping down this idea that we can get a bespoke deal. that is what mrs may is pushing for. you have to say it is a big ask. and in some ways, it is a politically

convenient ask for now. when it comes to the crunch in the negotiations, whether other eu countries will wear it is different. you know maybe then theresa may will have to decide are we going to lean to the sort of deal that norway and switzerland have or cut much more loose and go our own way with canada. there will come a moment when we will to say what we want. canada. there will come a moment when we will to say what we want]? theresa may every day is a victory, she is still weak and she hopes she will become stronger. some commentators said that because she is spelling out this two—year transition, that puts paid to the idea of no deal. does it?|j transition, that puts paid to the idea of no deal. does it? i really don't think so, no. as i say, if this speech doesn't do the business, then no deal is back on the cards. but we are not preparing for no deal. there is no movement on

customs, immigration. yes and no. if you listen to the brexiteers, they are maybe not quite softening us up for no deal, but they're sanguine about it and their view is we can be more confident on surviving on world organisation terms, boris johnson was saying, we don't have to be frightened, we are the fifth biggest economy in the world. we can do this. and you know that is a sort of... plenty of countries do? yes and their argument is we don't have to go on bended knee to europe. there is a view that maybe where this ends among brexiteers, because europe will never offer us the cake and eat it deal. so we may have to walk. it is not the favoured option of mr may. but she left it on the table and it is one of interesting things in her speech today will whether she puts it on the table

again and how much welly she gives it. everything we have heard is she wa nts to it. everything we have heard is she wants to be accommodating, we are europeans too. but will she put some steel in and repeat the warning, you cut up rough with us and we walk and we are not frightened to walk. i think you know, i will be listening to see whether she does play the no—deal card. to see whether she does play the no-deal card. you're looking here at the room where theresa may is going to be speaking in a short while. we expect her to take to the stage soon. florence, an interesting choice. long ties between florence and the united kingdom. i understand she will talk about shared history and a shared future? her hope is, i suppose that the mood music might just lower some of the ante in these negotiations. david davis, quite a

hard—nosed negotiations. david davis, quite a ha rd—nosed character. negotiations. david davis, quite a hard—nosed character. mrs may talking we are part of social fabric of europe and we are proud of it and we wa nt of europe and we are proud of it and we want to stay on good terms with the eu. we heard on the un on positions like iran, britain is standing with france and germany. the hope is maybe on the eu side they take a step back and pause to reflect on what happens if britain goes off in a storm. it is going to hit european economies too. it will hit european economies too. it will hit particularly the european financial sector. so there are big sta kes for financial sector. so there are big stakes for other countries. part of reason is to flag that up. we have an enormous amount in terms of history and in terms of our future. just looking at some of the advanced

briefing from the speech, she is going to talk about the profound responsibility of eu leader to get a deal. in effect saying is it is not just down to us. you guys too, it is in your interests to make this work. and maybe that too willjust help to give everyone a bit more room to ta ke give everyone a bit more room to take a step back and to try and get the talks go again. she has had a reshuffle this week, key personnel have been brought into no 10. she is saying she is driving from the front. as important as this speech is, it may be she has to do more within those european council meetings. she is in estonia next week. and there is a big one coming up week. and there is a big one coming up in october. she will have to carry it? that is true. there was some surprise that she had left to it david davis. traditionally when it david davis. traditionally when it comes to the big sort of eu treaties, it is prime ministers who do it. you think ofjohn major,

troenl, tony blair they fronted the negotiations. you add mrs may's fate and future is bound up with brexit. and so when you have her own future and how history bound up with this, thatis and how history bound up with this, that is a huge incentive to take a much more hands on role and maybe there is a sense that david davis's having a tough time. she has praised him, but the talks are stuck. maybe a clean pairof him, but the talks are stuck. maybe a clean pair of hands, a different face, a different language. there is a lot of pr about it. i remember being in brussels and saying britain's not come up with a calculation for the deal, but neither had the eu and mr barnier is good at this. we have to recognise, this is a negotiation and what we

hear from theresa may today is not herfinal position. this hear from theresa may today is not her final position. this figure of £18 billion. my impression is that in westminster they expect to have to pay more. but they're not going to pay more. but they're not going to put their maximum sum on the table. it is like going and buying a car, you don't put the maximum amount. the deal in the top drawer and one in the bottom. she starts at 18 billion and i expect them to be pushed up. when you talk to brexiteers they too are kind of 0k with that. when you talk about a0 billion, they could wear that. their priortive is having their independence — priority is having their independence day and to be able to say, we are out. they want independence day above everything. if there are still unresolved issues around timing and money and the future, they live with that, if they get independence day, they will feel

confident that we are on our way. even they at the moment are willing to cut mrs may a lot of slack, even about money. we should say hello to our bbc world viewers, who are joining us. you're looking at a room where theresa may is about to deliver her long—awaiting speech on britain's departure from the eu. 0ne line which has come out in the daily telegraph is that might leave before march 2019. what whoub the thinking behind that —— what would be the thinking behind that? gosh, i haven't heard that. i can only assume if there was a view that the eu was trying to humble britain offering a deal that was so unattractive then the british government may feel it is almost

duty bound just to walk away and not to carry on with a process that was clearly u na cce pta ble. that to carry on with a process that was clearly unacceptable. that would be an extraordinary outcome. i would imagine the british government would wa nt to imagine the british government would want to do everything it could to go right up to the wire and also we all know in eu negotiations it frequently does go down to the last minute of the last hour. i would think it is not impossible, not that likely, because i think the british government would want to give it their best shot. the danger fer they walked away is they would face accusations they were turning their back on europe and that could engender a backlash. ithink back on europe and that could engender a backlash. i think they would go right up to the buttons to try and get a deal. let's have

another look at the room. the backdrop to where theresa may will deliver this speech. somebody said the british embassy had to find this room in florence. it was not straight forward. this an ante room of the building she is in. reportedly they had to clean it up before they put the chairs in and the screen. it wasn't straight forward. but the italians are quite accommodating. she arrived in a mazzarati. in the audience will be the foreign secretary, boris johnson, also david davis, the brexit secretary, philip hammond and some italian dignitaries as well. no one i don't think from the italian government. though they will be watching closely no doubt. let's talk about the row of politics as we watch the ministers taking their

seat. the papers say borisjohnson has built a straw man and knocked it down and hasn't shifted the prime minister at all. do you believe that? well, to a degree. when you look back at mrjohnson's article at the weekend, he said pretty cleary we should not be paying for access to the single market. he left entirely vague whether he meant that was during the transitional period. since then, mrjohnson has indicated he is comfortable with the transitional period, he is not putting a time limit on it. he does haven't a problem with payment or payments to ensure access to the single market. my impression is that boris johnson's single market. my impression is that borisjohnson's intervention was less policy driven and more personality driven. i think he felt sidelined. he felt out of the loop of the brexit negotiations. i think the prime minister is coming up now.

let's listen? . applause. it's good to be here in this great city of florence today. at a critical time in the evolution of the relationship between the united kingdom and the eu. it was here more than anywhere else that the renaissance begin. a period that inspired centuries of creativity across our continent and which defined what it meant to be european. a period of history whose example shaped the modern world. a period of history that teaches us that when we come together in a spirit of ambition and innovation, we have it within ourselves to do great things. that shows us if we open our minds to new thinking and

new poss yibts —— possibilities we can forge a better, brighter future for all our peoples. and that is what i want to focus on today. for we are moving through a new and critical period in the history of the united kingdom's relationship with the eu. the british people have decided to leave the eu. and to be a global, free—trading nation, able to chart our own way in the world. for many, this is an exciting time. full of promise. for others, it is a worrying one. i look ahead with optimism, believing that if we use this moment to notjust change our relationship with europe, but also the way we do things a home, this will be a defining moment in the history of our nation and it is an exciting time for many in europe too. the european union is beginning

a new chapter in the story of its developmentmentjust a new chapter in the story of its developmentment just last week jean—claude juncker set out his ambitions for the future. there is a vibrant debate ambitions for the future. there is a vibra nt debate about ambitions for the future. there is a vibrant debate about the shape of the eu's institutions and the direction of the union in the years ahead. we don't want to stand in the way of that. we want to be your strongest friend and partner as the eu and uk thrive, side by side. and that partnership is important. for as we look ahead, we see shared challenges and opportunities in common. here, in italy today, allah two countries are working together to tackle some of the greatest challenges of our time —— ourtwo of the greatest challenges of our time —— our two countries. problem is where all too often, geography

has put italy on the front line. as i speak, the british national crime agency, borderforce i speak, the british national crime agency, border force and i speak, the british national crime agency, borderforce and navy working with our italian partners to save lives in the mid to rainy and and crackdown on the evil traffickers who are exploiting people seeking a better life —— in the mediterranean. from our positions at the forefront of the international coalition against dis, disturbing terrorist recruitment to their ranks. —— daesh. iwas delighted that the prime minister was able to join president macron and myself in an greening the first ever un summit of government and industry to move further and faster to stop terrorist use of the internet. mass migration and terrorism are the two examples of

the challenges to our shared european interests and values that we can only sold in partnership. the weakening growth of global trade, the loss of popular support for the forces of liberalism and free trade thatis forces of liberalism and free trade that is try being moves towards protectionism, the threat of climate change, the pleading and degrading the planet we leave for future generations, and most recently the outrageous proliferation of nuclear weapons by north korea, with the threat to use them. here, on our own continent, we see territorial aggression to the east and from the south, threats from instability and civil war. terrorism, crime and other challenges which respect no borders. the only way for us to respond to this vast array of challenges is for like—minded nations and peoples to come together

and defend the international order that we have worked so hard to create. and the values of liberty, democracy, human rights and the rule of law by which we stand. britain has always and will always stand with its friends and allies in defence of these values. 0ur decision to leave the european union is in no way a repudiation of this long—standing commitment. we may be leaving the european union, but we are not leaving europe. 0ur resolve to draw on the full weight of our military intelligence, diplomatic and development resources, to lead international action with our partners on the issues that affect the security and prosperity of our peoples is unchanged. 0ur the security and prosperity of our peoples is unchanged. our commitment to the defence and indeed the advance of our shared values is undimmed. 0ur determination to

define the stability, security and prosperity of our european neighbours and friends remains instead fast. and we do this as a sovereign nation in which the british people are in control —— remains steadfast. the decision to leave the institution of the european union was an expression of that desire, a statement of how they wa nt that desire, a statement of how they want their democracy to work. they wa nt want their democracy to work. they want more direct control of decisions that affect their daily lives and that means those decisions being made in britain by people directly accountable to them. the strength of feeling that the british people have about this need for control and the direct accountability of their politicians is one reason why, throughout its membership, the united kingdom has never totally felt at home being in the european union. and perhaps because of our history and

geography, the european union never felt, to us, like an integral part of our national story in the way it sta rts of our national story in the way it starts to so many elsewhere in europe. it is a matter of choices. the profound pooling of sovereignty thatis the profound pooling of sovereignty that is a crucial feature of the european union permits the corporation that brings an offence but it also means that when countries are in the minority, they must sometimes accept decisions they do not want, even affecting domestic matters with no market implications beyond their borders. and when decisions are taken they can be very ha rd to decisions are taken they can be very hard to change. so the british electorate made a choice. theyjoin dele which shows the power of democratic controlled over pooling that control —— they chose the power of democratic control. that is our choice. it does not mean

that we are no longer a proud member of the family of european nations and it does not mean we are turning our back on europe or worse, that we do not wish the eu to succeed. the success of the eu is profoundly in our national interest and that of the wider world. but having made this choice, the question now is whether we, the leaders of britain and of the eu member states and institutions can demonstrate the creativity and innovation and ambition that we need to shape a new partnership to the benefit of all our people. i believe we must and i believe we can. for while the uk's departure from the eu is inevitably a difficult process, it is all about interests for the negotiations to succeed. if they were to fail or be divided, the only beneficiaries would be those who reject our values

and oppose our interests. so i believe we share a profound sense of responsibility to make this change works smoothly and sensibly. not just for people today, but for the next generation who will inherit the world we leave them. the eyes of the world we leave them. the eyes of the world a re world we leave them. the eyes of the world are on us. but if we can be imaginative and creative about the way we establish this new relationship, if we can proceed on the basis of trust in each other i believe we can be optimistic about the future we can build for the united kingdom and for the european union. in my speech at lancaster house earlier this year, i set out the uk's negotiating objectives. those still stands today. since that speech and the triggering of article 50 in march, the uk has published 1a papers to address the current issues

in the talks and set out the building blocks of the relationship we'd like to see with the eu, as we leave and into the future. we've conducted three rounds of negotiations and while at times the negotiations and while at times the negotiations have been tough, it's clear that thanks to the professionalism and diligence of david davies and michel barnier we have made concrete progress on many important issues. for example, we have recognised from the outset that there are unique issues to consider when it comes to northern ireland. the uk government, the irish government and the eu as a whole have been clear that through the process of our withdrawal, we will protect the progress made in northern ireland over recent years and the lives and livelihoods that depend on its progress. as part of this we and the eu have committed to protecting the belfast agreement and the common travel area. and looking ahead we have both stated explicitly that we will not accept any physical

infrastructure at the border. we owe it to the people of northern ireland andindeed it to the people of northern ireland and indeed to everyone on the island of ireland to see through these commitments. we've also made significant progress on how we look after european nationals living in the uk, and british nationals living in the 27 member states of the eu. i know that this whole process has been a cause of great worry and anxiety for them and their loved ones but i want to repeat, to the 600,000 italians in the uk and indeed to all eu citizens who have made their lives in our country, that we want you to stay, we value you and we thank you for your contribution to our national life. and it has been and remains one of my first goals in this negotiation to ensure that you can carry on living your lives as before. i am clear that the guarantee i'm giving on your rights is real. and i doubt

anyone with real experience of the uk would doubt the independence of our courts or the rigour with which they will uphold people's legal rights. but i know that there are concerns that over time the rights of eu citizens in the uk and uk citizens overseas will divert. i wa nt to citizens overseas will divert. i want to incorporate our agreement fully into uk law and make sure that the uk courts can refer directly to it. and when there is uncertainty around underlying eu law, i want the uk courts to be able to take into account the judgments of the european court of justice account the judgments of the european court ofjustice with a view to insuring consistent interpretation. 0n view to insuring consistent interpretation. on this basis i hope that our teams can reach agreement quickly. at the moment, the negotiations are focused on the arrangements for the uk's withdrawal from the eu but we need to move on to talk about our future relationship. of course we recognise

that we can't leave the eu and have everything stay the same. life, for us, will be different. but what we do wantand us, will be different. but what we do want and what we hope that you, our european friends what also is that we can remain partners working for our mutual benefit. in short, we wa nt to for our mutual benefit. in short, we want to work hand—in—hand with the european union rather than as part of the european union. that is why in my speech at lancaster house i said that the united kingdom would seek to secure a new, deep and special partnership with the european union. and this should span a new economic relationship and a new relationship on security. so let me set out what each of these relationships could look like before turning to the question of how we get there. let me start with the economic partnership. the united kingdom is leaving the european union. we will no longer be members ofa union. we will no longer be members of a single market or its customs

union. for we understand that the single market for freedoms are indivisible from our european friends. the single market is built ona friends. the single market is built on a balance of rights and obligations and we do not pretend that you can have all the benefits of membership of the single market without its obligations. so our task is to find a new framework that allows for a close economic partnership but holds those rights and obligations in a new and different balance. but as we work out together how to do so we don't start with a blank sheet of paper like other external partners negotiating a free trade deal from scratch. in fact we start from an unprecedented position. for we have the same rules and regulations as the same rules and regulations as the eu and our eu withdrawal bill will ensure they are carried over to our domestic law at the moment we leave the eu. so the question for us

now in building a new economic partnership is not how we bring our rules and regulations closer together, but what we do win one of us together, but what we do win one of us wants to make changes. 0ne together, but what we do win one of us wants to make changes. one way to approach this question is to put forward a start and an imaginative choice between two models, either something based on european economic area membership or a traditional free—trade agreement such as that the eu has negotiated recently with canada. i don't believe either of these options would be best for the uk or best for the eu. european economic area membership would mean the uk having to adopt at home automatically and in their entirety new eu rules, rules over which in future we will have little influence and no vote. such a loss of democratic control could not work for the british people. ifear it would lead to friction and a damaging reopening of the nature of our relationship in the nearfuture.

the very last thing that anyone on either side of the channel wants. as for a canadian style free—trade agreement we should recognise that this is the most advanced free—trade agreement the eu has yet concluded, and a breakthrough between trade and canada —— between canada and the youth you —— and the eu. nevertheless, it would be such a restriction on our mutual market access it would benefit neither of our economies. it would start for me. is that there is no pre—existing regulatory relationship between us. president suggests it could take yea rs president suggests it could take years to negotiate. we can do so much better than this. as i said at lancaster house, let us not merely seek to adopt a model into it by other countries, instead let us be creative as well as practical in designing an ambitious economic

partnership which respects the freedoms and principles of the eu and the wishes of the british people. and i believe there are good reasons for this level of optimism and ambition. first of all, the uk is the eu's largest trading partner, one of the largest economies in the world and a market of considerable importance for many businesses and jobs across the continent. and the eu is our largest trading partner. so it is in all our interests to find a creative solution. and the eu has shown in the past that creative arrangements can be agreed in other areas, for example it has developed areas, for example it has developed a diverse arrangement of —— diverse number of arrangements with other countries outside the eu. furthermore we share the same set of fundamental beliefs, a belief in free trade, rigorous and fair competition, strong consumer rights

and that trying to beat other countries' industries by unfairly subsidising one's own is a mistake. so there is no need to impose ta riffs so there is no need to impose tariffs where we do not have them now and i do not think anyone seriously is contemplating this. and as we set out in a future partnership paper when it comes to trading goods we will do everything we can to avoid friction at the border. but of course the regulatory issues are crucial. we share a commitment to high regulatory standards. people in britain do not wa nt standards. people in britain do not want shoddy goods and services, a poor environment or exploitative working practices. i can never imagine them thinking those things to be acceptable. the government i lead is committed not only to protecting high standards but strengthening them. i'm optimistic about what we can achieve by finding about what we can achieve by finding a creative solution to a new economic relationship that can support prosperity for all our peoples. now in any trading

relationship, both sides have to agree on a set of rules which govern how each side behaves. we will need to discuss with our european partners new ways of managing our interdependence and differences in the context of our shared values. there will be areas of policy and regulation which are outside the scope of our trade and economic relations which should be straightforward. there will be areas that affect our economic relations where we and our european friends may have different goals or have the same goals but wants to achieve them through different means. and there will be areas where we want to achieve the same goals in the same way is because it makes sense for our economies. and because rights and obligations must be held in balance, the decisions we both take will have consequences for the uk's access to european markets and vice ve rsa . access to european markets and vice versa. to make this partnership work, because disagreements inevitably arise, we will need a

strong and appropriate dispute resolution mechanism. it is vital that any agreement reached, the specific terms and principles on which it is based, are determined in the same way by the european union and the united kingdom and we want to discuss how we do that. this could not mean the european court of justice or uk courts being the arbiter of disputes about the limitation of the agreement between the uk and eu agreement. it would not be right for one party's courts to have jurisdiction over the other but i believe we can find an appropriate mechanism. the partnership would be comprehensive and ambitious. it would be underpinned by high standards and a practical approach to regulation that enables us to continue to work together in bringing shared prosperity to our peoples for generations to come. let me turn to

the new security relationship that we wa nt the new security relationship that we want to see. to keep our people safe and to secure our values and interests, i believe it's essential that although the uk is leaving the eu, the quality of our cooperation on security is maintained. we believe we should be as open—minded as possible about how we continue to work together on what can be life and death matters. 0ur security cooperation is not just and death matters. 0ur security cooperation is notjust vital because our people face the same threats, but also because we share a deep and historic belief in the same values, the values of peace, democracy, human rights and the rule of law. of course there is no pre—existing model for cooperation between the eu and external partners, which replicates the full scale of collaboration that exists between the eu and the uk on security, law enforcement and criminal justice. security, law enforcement and

criminaljustice. but as the threats we face evolve faster than ever, i believe it is vital that we work together to design new dynamic arrangements that go beyond the existing arrangement is the eu has in this area and draw on the legal models that the eu has previously used to structure religion ships with external partners in other fields such as trade. we are proposing a new agreement that provides a compressive framework for security, law enforcement and justice cooperation —— comprehensive framework. this would complement the extensive and mature bilateral relationships that we already have with european friends to promote our common security. 0ur ambition would be to build a model that is underpinned by our shared principles including high standards of data protection and human rights. it would be kept sufficiently versatile

and dynamic to respond to the ever evolving threats that we face. and it would create an ongoing dialogue in which law enforcement and criminal justice in which law enforcement and criminaljustice priorities in which law enforcement and criminal justice priorities can in which law enforcement and criminaljustice priorities can be shared and where appropriate, tackled jointly. we are also proposing a far—reaching partnership on how we protect europe together from the threats we face in the world today. how we work together to promote shared values and interests abroad, whether security, spreading the rule of law, dealing with emerging threats, dealing with a migration crisis or helping countries out of poverty. the united kingdom has outstanding capabilities. we have the biggest defence budget in europe and one of the largest development budgets in the largest development budgets in the world. we have a far—reaching diplomatic network and world—class security, intelligence and law—enforcement services. so, what we are offering would be unprecedented in its breadth, taking

in cooperation on diplomacy, defence, security and development and it would be unprecedented in its depth, in terms of the degree of engagement we could deliver. it is our ambition to work closely with the eu, protecting our people, promoting our values and ensure the region security of our continent. the united kingdom is unconditionally committed to maintaining europe's security and the uk will continue to offer aid and assistance to eu member states that are the victims of armed aggression, terrorism and natural or man—made disasters. taken as a whole, this bold new security partnership will not only reflect our new history and the practical benefits of cooperation in tackling shared threats, but demonstrate the uk's genuine commitment to promoting our shared values across the world

and to maintaining a secure and prosper in europe. that is the partnership i want britain and the european union to have in the future. none of its goals should be controversial, everything i've said is about creating a long—term relationship through which the nations of the european union and the united kingdom can work together for the mutual benefit of all our people. if we adopt this vision of a deep and special partnership, the question is then how we get there. how we build a bridge from where we are now to where we want to be. the united kingdom will cease to be a member of the european union on the 29th of march, 2019. we were no long sit at the european council table or in the council of ministers and we will no longer have members of the european parliament. 0ur relations with countries outside the eu can be developed in new ways including through our own trade negotiations because we will no longer be an eu

country and we will not benefit from future eu trade negotiations. at that point neither the uk nor the eu and its member states will be in a position to implements loosely the detailed arrangements that will underpin this new relationship. neither is the eu legally able to include an agreement with the uk as an external partner while it is still part of the eu and such an agreement on the future partnership would require the appropriate legal ratification, which would take time. it is also the case that people and businesses, in the uk and in the eu, would benefit from a period to adjust to the new arrangements in a smooth and orderly way. as i said in my speech at lancaster house, a period of implementation would be in our mutual interest and that is why i'm proposing that there should be such a period after the uk leaves

the eu. clearly, people, businesses and public services should only have to plan for one set of changes in the relationship between the uk and the relationship between the uk and the eu. during the implementation period, access to one another‘s markets should continue on current terms and britain should also 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. how long the period is should be determined simply by how long it would take to implement the new processes and new systems that will underpin the future partnership. for example, it will take time to put in place the new immigration system required to ta ke new immigration system required to take control of the uk borders. during the demonstration period,

people will continue to be ever do come and live and work in the uk —— implementation period. there will be a registration period and preparation for the new regime. these points to the argumentation period of two years. i don't believe either the eu or the british people would want uk to stay longer in the existing structures than is necessary. we can also agree to bring forward aspects of the future framework such as new dispute resolution mechanisms more quickly, if this can be done smoothly. it is clear that what would be most helpful to people and businesses on both sides who want this process to be smooth and orderly is for us to agree the detailed arrangements for this implementation period as early as possible. although we recognise that the eu institutions will need to adopt a formal position. and at the heart of these arrangements there should be a clear double lock,

a guarantee that there will be a period of implementation giving businesses and people alike the certainty that they will be able to prepare for change and a guarantee that this implementation period will be time—limited, giving everyone the certainty that this will not go on for ever. these arrangements will create valuable certainty. but in this context, i'm conscious that our departure causes another type of uncertainty for the remaining member states and their taxpayers over the eu budget. some of the claims made on this issue is our exaggerated and a helpful and we can only resolve this as part of the settlement of all the issues i've been talking about today. still i do not want our partners to fear that they will need to pay more or receive less over the remainer of the current budget plan asa remainer of the current budget plan as a result of our decision —— over

the rest of the current budget plan. the uk will honour commitments made over the period of our membership and we will want to continue working together in ways that promote the long—term economic development of our continent. this includes continuing to take part in those specific policies and programmes that are greatly to the uk and eu's joint advantage such as those promoting science, education and culture and those that promote our mutual security. as i set out in my speech at lancaster house, in doing so we would want to make an ongoing contribution to cover our fair share of the costs involved. when i gave my speech and the beginning of this year, i spoke notjust about the preparations we were making for successful negotiation, but also that preparations for our life outside the european union. with or without what i hope will be a successful deal and the necessary

work continues on these fronts so that we are able to meet any eventual outcome. but as we meet here today, in this city of creativity and rebirth, let us open our minds to the possible, to a new era of co—operation and partnership between the uk and the eu and to a stronger, fairer, more prosperous future for us all. for that is the prize, if we get this negotiation right. a sovereign united kingdom and a confident european union, both free to charge their own course, a new partnership of values and interests, a new alliance that could stand strongly together in the world. that is the goal, towards which we must work in the months ahead, as the relationship between britain and europe evolves. however it does so, i'm clear that britain's future is bright. 0urfundamentals

are strong. a legal system respected around the world, a keen openness to foreign investment, and enthusiasm foreign investment, and enthusiasm for innovation, and ease of doing business. some of the best universities and research you can find anywhere, and exceptional national talent for creativity and an indomitable spirit. it is our fundamental strengths that determine a country's success. that is why britain's economy will always be strong. there are other reasons why our future should give us confidence. we will always be a champion of economic openness. we will always be a country whose pitch to the world is high standards at home. when we differ from the to the world is high standards at home. when we differfrom the eu, it won't be to obtain an unfair advantage, but because we want rules that are right for britain's particular situation. the best way for us