British Prime Minister Theresa May is expected to announce the UK will leave the single market, the customs union and European Court of Justice – unless the European Union agrees to end freedom of movement in a speech on Tuesday.
Theresa May is expected to say the UK will leave the single market in a speech on Tuesday.
The UK Sun on Sunday says immigration will be a red line for Brexit negotiators.
Britain may be forced to change its economic model if it is locked out of the single market after Brexit, the UK’s Chancellor has said.
Philip Hammond said the UK may have to alter track to “regain competitiveness” if Britain suffers “economic damage” by leaving the European Union without a deal on market access.
In an interview with German newspaper Welt am Sonntag, he said a move away from a European-style system would be needed, indicating cuts to corporation tax.
When asked if the UK’s future model is that of a “tax haven”, he said: “I personally hope we will be able to remain in the mainstream of European economic and social thinking. But if we are forced to be something different, then we will have to become something different.
“If we have no access to the European market, if we are closed off, if Britain were to leave the European Union without an agreement on market access, then we could suffer from economic damage at least in the short-term.
“In this case, we could be forced to change our economic model and we will have to change our model to regain competitiveness.
“And you can be sure we will do whatever we have to do. The British people are not going to lie down and say, too bad, we’ve been wounded. We will change our model, and we will come back, and we will be competitively engaged.”
But he said he remains “optimistic” that an agreement with reciprocal market access can be struck.