North East business chiefs cautiously welcome Theresa May Brexit plan

Mrs May warned fellow EU nations that she is ready to walk away from Brexit talks rather than accept a “punitive” deal.

In a speech setting out her 12 key objectives for withdrawal, Mrs May announced that Britain will leave the European single market but seek a “bold and ambitious” free trade agreement to allow it to continue trading.

Mrs May confirmed she wants to take Britain out of the jurisdiction of the European Court of Justice.

She also gave her strongest hint yet that the UK could leave the European customs union (CU), stating that she wanted to ensure “frictionless” cross-border trade but had an “open mind” on whether that should be done through associate membership of the CU or a customs agreement.

She did not make clear whether a vote against any agreement would mean the UK staying in the EU or crashing out without a deal.

But she warned: “I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path.

“That would be an act of calamitous self-harm for the countries of Europe.”

Jonathan Walker, head of policy at the North East England Chamber of Commerce, said Mrs May will be judged on the final outcome of whatever deal is agreed.

He said: “We have known for some time that remaining a member of the single market and the Government’s commitment to restricting free movement would be incompatible.

“In light of this, today’s speech certainly touched on some of the issues that matter most to our businesses, but ultimately the PM will be judged on the outcome of the negotiations rather than the content of a speech.

“Our firms need un-bureaucratic and low cost access to the European market, support to grow their international presence and a migration system that allows our region to retain and compete for skilled talent.”