Jeff J Mitchell / Getty
Theresa May delivers her landmark Brexit speech in Florence.
The speech sets out a "generous offer," including continued payments into EU budgets.
May calls for a "time-limited" transition period of around two years on "current terms".
Modified form of free movement from the EU could continue during transition.
Conservative backbenchers angered by prospect of continued payments.
EU welcomes May's "constructive" speech.
LONDON — Britain will continue to pay tens of billions of pounds to the EU for years after Brexit, Theresa May has confirmed as she delivered a landmark speech in Florence, Italy.
The prime minister, indicated that the UK is open to a "time-limited" transition period of around two years which could mean Britain continuing to pay into EU budgets until at least 2021.
"I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave," May said, adding that "The UK will honour commitments we have made during the period of our membership."
She said there would be a "period of implementation in our mutual interests" during which "access to [European] markets should continue on current terms," indicating that Britain will remain inside the single market.
May also signalled that the free movement of people from the EU would continue, but suggested that those arriving would have to register upon arrival.
The PM did not state a specific figure for the divorce bill in her speech but has reportedly opened the door to Britain paying between €20-40bn to the EU after it leaves in 2019, in a commitment that is already angering Brexit-supporting Conservative MPs.
May's offer, which is designed to target EU leaders directly in order to help restart negotiations which have stalled over the UK's so-called divorce bill, falls well short of EU expectations which are reportedly up to €100bn.
The speech was welcomed by the EU's chief negotiator Michel Barnier.
"In her speech in Florence, Prime Minister Theresa May has expressed a constructive spirit which is also the spirit of the European Union during this unique negotiation," Barnier said in a statement, adding that "The speech shows a willingness to move forward."
On the commitment to pay into the EU after Brexit, Barnier said they would assess "the concrete implications of this pledge."
"We shall assess, on the basis of the commitments taken by the 28 Member States, whether this assurance covers all commitments made by the United Kingdom as a Member State of the European Union."
May called on her European partners to accept their own responsibility for progressing the talks.
"While the UK’s departure from the EU is inevitably a difficult process, it is in all of our interests for our negotiations to succeed," she said in a speech in the Santa Maria Novella church.
"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."
May also reached out on the question of EU citzens living in the UK, saying she wanted them to carry on "living their lives as before". However, she fell short of offering them continued protection under the jurisdiction of European courts.
"Britain is leaving the European Union but we are not leaving Europe," she said.
However, despite reaching out to the EU on some issues, she risked angering many of those Brits who voted to remain in the EU, saying that: "Britain has never entirely felt at home in the European Union."
Watch Theresa May: We can go forward together
EU negotiators have refused to discuss the nature of Britain's future relationship with the EU until Britain makes "sufficient progress" on the divorce bill.
However, even this offer is likely to prove controversial with Conservative backbenchers. Leading Eurosceptic Tory MP Peter Bone told Sky News this morning that "any divorce bill will be too much for me...
"If there's going to be any divorce bill, which is a very strange idea, then it should be to us."
A bespoke trade deal
May ruled out Britain following "off the shelf" models such as joining the European Economic Area. She said that either following the Norwegian model of remaining in the single market, but outside the EU, or following the model of a Canadian-style free trade deal, would not meet Britain's needs.
"We can do so much better than this... Let us not follow a model enjoyed by other countries," she said, indicating that Britain would find it's own bespoke model for its relationship with the EU after Brexit.
The announcement was welcomed by the foreign secretary Boris Johnson, who had reportedly threatened to resign over the issue.
"PM speech was positive, optimistic & dynamic - and rightly disposes of the Norway option! Forwards!" he tweeted.
May also signalled that Britain would refuse to water down regulations as part of any post-Brexit deal
"People in Britain do not want shoddy goods.. or exploitative employment practices," she said.
She also indicated that while Britain will leave the jurisdiction of the European Court of Justice, it would still need to be part of some judicial mechanism such as the EFTA court.
However, May's comments met a lukewarm reception from the markets, with the pound falling as her speech developed.
Jack Taylor / GettyThe speech, the content of which was agreed by Cabinet on Thursday, is designed to offer an inspirational message about Britain's future outside the EU, following criticism from some quarters, including from her foreign secretary Boris Johnson, that the PM has failed to set out a positive vision for Brexit.
"For many, this is an exciting time full of promise," she said.
"The eyes of the world are on us but if we can be imaginative and creative about the way we establish this new relationship," May added in comments that aides said amounted to an "ambitious vision" for post-Brexit Britain.
"I believe we can be optimistic about the future we can build for the United Kingdom and for the European Union.”
May's speech was watched by Johnson who earlier this week was forced to deny reports that he planned to resign if it contained a commitment to a softer Brexit.
The PM added that "Britain’s future is bright," before saying that: "our fundamental strengths are considerable; a legal system respected around the world; a keen openness to foreign investment; and enthusiasm for innovation; an ease of doing business; some of the best universities and researchers you can find anywhere; an exceptional national talent for creativity and an indomitable spirit."
She added: "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."
The EU's chief negotiator Michel Barnier did not attend the speech, but is expected to deliver his own response shortly after May sits down.
Analysis: May makes Brexit progress but offers little detail
REUTERS/Max RossiTheresa May's speech, delivered in the grand surroundings of the catholic Santa Maria Novella church, was designed to offer what aides described as an "ambitious vision" for Brexit. In the event, the speech was high on ambition, but low on a clear vision of what Britain's future relationship with Europe will actually look like.
Peppered with references to 'optimism', 'vision', 'enthusiasm' and 'innovation', listeners were left waiting in vain for answers to some of the big questions that remain about what we can expect from Brexit.
But while the speech was perhaps necessarily vague on detail, there were at least some signs of progress on substance. Discussions over the so-called 'divorce bill' which have so far been the biggest stumbling block in Brexit talks, can at least now begin after May indicated that the UK is willing to fill at least some of the hole that will be left in EU budgets after Brexit.
May also signalled that any transition period would allow Britain to continue trading on "current terms" with free movement and the single market, which will do much to reassure both UK businesses and our EU partners.
There was progress too on EU citizens rights where May indicated that their rights will be enshrined in UK law. However she stopped short of accepting continued protection from European courts — the EU's main demand in talks.
When it came to the other major point of the early stages of Brexit talks — the Northern Ireland border — there was less sign of movement, with May only insisting that there would be "no physical border" while calling for an "imaginative" solution to the problem of what to do once Britain leaves the Customs Union after Brexit.
On all these issues, Britain now has just over a year until a final deal will need to go to the European parliament for ratification. After months of negotiations, progress has so far been slow. May's speech today at least showed some signs of movement, however slow that movement may continue to be.