Key Points:

UK will not seek membership of the Single Market
Freedom of movement for EU citizens will end
UK to leave full membership of the Customs Union, possibly to seek Associate Member status
Phased implementation of transition arrangements
UK to seek a Free Trade Agreement with the EU – but “no deal” is better than “a bad deal”
Both Houses of Parliament will vote on the final exit agreement

Theresa May’s much anticipated speech on Brexit today (17 January) provided some key details about a Parliamentary vote on the final deal to exit the EU, certainty that we are leaving the Single Market and confirmation that EU freedom of movement to the UK will end. But for the most part, the speech was about setting the tone for her Government’s approach. Ms May took the moral high ground, disavowing a punitive negotiating approach, and reaching out a hand of friendship to EU partners, Remain voters and EU citizens already living in the UK. The Prime Minister emphasised that Britain wished for the future success of the EU – phrases such as “friendship” and “partners” peppered the speech. If not quite soaring in rhetoric, her words did paint an optimistic, progressive vision for Britain, Europe and the world.

The speech has been well-received in most quarters. Some will inevitably complain of a lack of detail, but the Prime Minister gave us much as she reasonably could at this stage, before Article 50 and formal negotiations have even begun. The speech ends speculation on the Single Market and Parliament’s role (carefully pre-briefing the Single Market news has avoided a negative market reaction to the speech), which gives markets and political actors plenty of certainty to work around.

The intended audience was broad – at times the Prime Minister addressed European governments and citizens directly, at other times she spoke to the British public about the importance of unity, and addressed the devolved nations directly. At other points the message was for a global audience, singling out India, Brazil, China and the US as key trading markets, while also namechecking smaller markets such as Australia, New Zealand and the Gulf States.

Importantly the Prime Minister acknowledged the vexed question of freedom of movement from the Republic of Ireland, Britain’s only land border with an EU state. However, there was no sense of how her government would solve that conundrum. The Good Friday Peace Accords guarantee an open border for Ulster, but how to maintain that while simultaneously controlling movements from the EU remains unanswered. But the Prime Minister did commit to maintaining the special relationship, people-to-people links and a common travel area with Ireland.

Much of the speech focussed on trade, and the vision of “A Global Britain”. We expect to hear this phrase a lot going forward. Ms May offered some optimistic reasons for Brexit – mostly to do with Britain’s unique polity and Parliamentary sovereignty, but also some understated criticism of the EU’s lack of flexibility.

Overall it was a speech to establish principles and tone. Ms May is interested in “the ends, not just the means”, and the vision of a free, global trading nation. The speech was a strong performance – it now remains to be seen whether her words have moved continental decision-makers and detractors from the harder edges of the Leave and Remain factions at home.