BREXIT: 'Fundamental question' remains unanswered as Brexit discussions begin, says expert

This is part of Out-Law's series of news and insights from Pinsent Masons experts on the impact of the UK's EU referendum. Watch our video on the issues facing businesses and sign up to receive our 'What next?' checklist.

However, new prime minister Theresa May will also press for "controls on the numbers of people who come to Britain from Europe" as part of the Brexit negotiations, according to press reports following the first meeting of the cabinet following its summer break.

EU law expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com, said that although the discussions appeared to have "helped move forward the government's thinking", the "fundamental question" of the Brexit debate "appears to remain unanswered".

"In its negotiations with the EU, will the UK government prioritise limiting migrant numbers over preserving unconstrained access to EU markets for goods and services, especially financial services – or vice versa?" he said.

"The government may well be seeking a bespoke trade deal with the EU but, realistically, it is likely to need to prioritise either limiting migrant numbers or preserving access to EU markets," he said.

The Institute of Fiscal Studies (IFS), the think tank, warned last month that 'access to' the EU's single market post-Brexit was a "virtually meaningless" concept, as only full membership of the trading bloc allowed countries to trade with the rest of the EU without being subject to trade barriers and tariffs. Full membership of the single market would require freedom of movement, compliance with relevant EU regulations and a financial contribution, according to the report.

The UK's financial services industry has indicated that its preferred option is for the UK to seek access to the single market. This will allow it to continue to benefit from so-called 'passporting' arrangements which enable UK-based firms to trade in every EU member state without having to seek multiple authorisations.

Speaking before the cabinet meeting, May said that "quite a lot of work" on Brexit had already been done by ministers. The BBC reported that the various ministers had been asked to identify the "opportunities" for their departments ahead of the meeting.

"We must continue to be very clear that 'Brexit means Brexit', that we're going to make a success of it," she said. "That means there's no second referendum; no attempts to sort of stay in the EU by the back door; that we're actually going to deliver on this."

The government has also ruled out giving parliament a vote on whether and when to trigger 'Article 50' of the Treaty on European Union (TEU), giving official notification of the UK's intention to leave the EU.