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‘Getting to grips with the detail’: City partners cautiously optimistic over May’s Brexit speech

Top City lawyers have reacted positively to Theresa May’s landmark speech on the UK’s future relationship with the EU which said the UK would leave the single market and take back control of its borders.

The speech saw the Prime Minister commit to putting the final Brexit deal to a vote in Parliament and set out 12 priorities for the negotiating table, including leaving the single market and striking up a separate customs union deal.

May called for a ‘truly global Britain’ and ‘a smooth orderly Brexit’. Sterling reacted well to the news with the pound rising as much as 2.5% against the dollar.

Other key points for City lawyers included the provision to pull the UK from the jurisdiction of the European Court of Justice, with May adding: ‘We will take back control of our own laws.’

Top City partners welcomed the clarity provided by the speech after speculation over the UK’s future with the Prime Minister planning to trigger ‘article 50’ to start the process of leaving the EU in March.

Linklaters corporate partner Matt Bland told Legal Business: ‘There is some very helpful clarity in what the Prime Minister has said in terms of her thinking and the direction of travel for the Brexit negotiations. This is what I think people have been looking for. That said, more detail will likely be demanded in the coming weeks and months and so whether the initial positive reaction translates into a more certain and stable market environment is an open question.’

Herbert Smith Freehills corporate partner and international M&A specialist Gavin Williams said: ‘The length of the speech clearly indicates that the government is getting to grips with the detail, and that they’re not by any means dismissive of the complexity and challenges that lie ahead.

Williams (pictured) added: ‘The choice of a comprehensive free trade agreement with the EU over some sort of hybrid form of membership such as the Canadian arrangement is law code for a full-blown trade agreement across all sectors of the economy is a great idea, but it’s got its shortcomings such as the complexity of negotiating the services sector, which will likely be at an unprecedented scale.’

London co-managing partner at Debevoise & Plimpton, Lord Peter Goldsmith added: ‘While Prime Minister May’s speech today provides a lot of welcome clarity, it should not obscure the fact there is a lot more detail that remains unknown. We are certainly clearer on the negotiating position of the UK government, and the clarity over its desired Brexit model is encouraging. But achieving it is another question altogether. Even some of the positive aspects of the model, such as the continued freedom to provide financial services across national borders, have question marks and rely on the outcome of the negotiations. There is a lot more to say.’

The speech from the Prime Minister suggested that although the UK did not seek membership of the single market it would want to be part of the customs union while also aiming to strike its own international trade deals.

Striking up new free trade deals presents a major challenge to the Prime Minister and her negotiating team. Morgan Lewis head of international finance Bruce Johnston said: ‘Free trade agreements with the EU and the USA will take many years to negotiate long after the UK leaves the EU.  Serious negotiation of free trade agreements cannot start until the exit agreement with the EU is signed.’

Worries for law firms since the Brexit vote in June last year has seen a record number of solicitors added to the roll of the Law Society of Ireland. While May confirmed Parliament would vote on the final EU deal, the triggering of article 50 is being considered by the Supreme Court in a challenge brought by Gina Miller and her solicitors Mishcon de Reya.