Brexit – Where do we stand 18 March 2019?

Summary

  • Government strategy thrown into disarray by Speaker’s ruling that Parliament cannot vote on the May withdrawal deal again
  • The threat of no deal Brexit on 29 March has been reduced, but not entirely removed
  • The threat of no deal Brexit at some point in the future is still there, but remains small
  • Brexit will almost certainly be delayed, at least until May / June, but more likely for longer
  • Longer delay would be likely to lead to a “softer” Brexit with closer alignment to the EU
  • Determining the future EU-UK trade relationship remains heavily dependent on arrangements over the Irish border
  • These will form the baseline for all other UK trade relationships, including the UK-US FTA

 “Confusion now hath made his masterpiece”  Shakespeare: Macbeth Act II, Scene 3

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Brexit – where do we stand at the end of February 2019

Where are we now?What Next?

The UK’s progress towards leaving the European Union has been a tortuous and turbulent affair. It has been marked by Prime Minister Theresa May’s Government suffering repeated heavy defeats in Parliament, which would normally have led to a change of policy if not of Government, but carrying on with its Brexit stance unchanged. So you could be forgiven for assuming that a series of votes initiated by backbenchers at the end of February in which the Government suffered no defeats would also signal no change. Not so. Even more paradoxical, the significant change to the Government’s approach at the end of February may make the outcome the Government has been aiming for all along a little more likely.

What happened? In mid-February, the Government headed off a serious push to give Parliament more influence over the process through an amendment tabled by Labour’s Yvette Cooper, by promising more opportunities to vote at the end of the month. Amid rumblings of discontent among the hitherto loyal Brexit Delivery Group (100+ Leave and Remain supporting Conservative MPs who have supported the PM throughout) and the threat of mass resignations of Ministers, at the end of February the PM effectively adopted the Cooper amendment as her own policy, which led Cooper to propose a further amendment designed to bind the PM to stick to her commitment – this passed with a very comfortable majority, though around 110 Conservatives failed to support it (most abstained, 22 voted against).

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Brexit Date 29 March 2019: Countdown for shipping goods from the UK and to the UK from Asia, Americas and Africa

Brexit is scheduled to Brexit Clockbecome effective at the end of 29 March 2019 and will take place either with a Withdrawal Agreement or without one having been entered into between the UK and the EU-27. At this point in time it is possible that the Article 50 TEU notice is withdrawn by the UK Government. Whether the Brexit Date 29 March 2019 is postponed upon application of the UK and agreed with the unanimous consent of the other 27 Member States is still undecided.

Upon Brexit becoming effective the UK will cease to be party to the existing Free Trade Agreements and Association Agreements the EU currently has entered into with a multitude of countries and regional free trade zones around the world in the last decades. The UK is currently striving to enter into its own binding agreements with such other countries to come into force on 30 March 2019 but so far only continuity agreements with Switzerland and a number of smaller UK trading partners have been inked.

There is no difference between a “Deal” and a “No Deal” Scenario in relation to the termination of the existing Free Trade Agreement and Association Agreements on 29 March 2019. Even if the UK House of Commons should change its mind and ratify the Withdrawal Agreement, and even if the Transition Period until 31 December 2020 contemplated in the Withdrawal Agreement under Articles 126 and 127 thereof would then come into force, such Transition Period only applies in the relationship between the UK and the EU-27, but does not bind any other country around the world without their express consent.

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Is your business prepared for “no deal”?

Brexit ArrowWith continuing uncertainty, there is still a lack of clarity on what the final Brexit arrangements will look like. Many companies have been planning for the implications of Brexit for some time, whereas some still need to consider how Brexit may affect their operations. Both the UK government and the EU are encouraging businesses to prepare for the possibility of a no-deal Brexit. Regardless of size, plans need to be put in place so that businesses can quickly react to whatever the final Brexit deal looks like.

As a result, we have put together a Brexit Readiness Guide which is intended to help businesses navigate the continuing uncertainty and possibility of “no deal”, along with a summary of the core services we provide to help you and your business prepare for the ultimate outcome.

Brexit – Where are we now?

Brexit Countdown

Over the period since the rejection of the Withdrawal Agreement, the Prime Minister’s tactic has been to try to bring the pro-Brexit wing of the Conservative Party, and the Northern Ireland Democratic Unionists, back on side.  No.10 appear to have been successful in whittling the pro-Brexit wing’s nominal resistance to the Withdrawal Agreement (which was very wide ranging at the time of the vote on 15th Jan) down to just the Northern Ireland backstop – the failsafe mechanism in the Withdrawal Agreement to ensure that there will be no hard border on the island of Ireland, but which the Pro-Brexit wing fear is a trap to keep the UK permanently in customs and regulatory alignment with the EU.  Until yesterday morning, No.10 hoped to achieve this without attempting to renegotiate the Withdrawal Agreement, something the EU has been adamant is not on the cards.  But No.10’s aim for a legally binding side agreement looked unlikely to bring the Brexiteers on side.  So on Tuesday the PM announced that she was willing to go back to the EU and to seek changes to the Withdrawal Agreement.  This – some would say desperate – volte face by the Prime Minister is very significant background to yesterday’s votes in Parliament.

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EU Settlement Scheme Public Test Phase Now Open

WebinarEU citizens and their family members may now apply under the EU Settlement Scheme as part of a public test phase, running from 21 January 2019.

Register now for our Brexit Immigration webinar on EU Settlement and the White Paper at 12.30pm on Thursday 24 January for practical guidance on how to support your affected employees through the application process.

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No-Deal Brexit and Contemplated German Temporary Permissions Scheme for Banks, Insurers and Financial Services Providers

As it stands, the UK will cease to be a member state of the European Union (EU) as of 30 March 2019.

On 24 November 2018, the UK and the EU agreed to enter into a Withdrawal Agreement (the Withdrawal Agreement). The Withdrawal Agreement provides in Article 127 (6) that during a transition period from 30 March 2019 to 31 December 2020 (the Transition Period), any reference in EU law to a member state of the EU shall include the UK.

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No-Deal Brexit and EU Commission Approach: General Principle of No Contingency Measures for UK Economic Operators

As it stands, the UK will cease to be a member state of the European Union as of 30 March 2019.

On 24 November 2018 the UK and the EU agreed to enter into a Withdrawal Agreement. The Withdrawal Agreement provides in Article 127 (6) that during a transition period from 30 March 2019 to 31 December 2020 any reference in EU law to a Member State of the EU shall include the UK and accordingly the legal position of economic operators from the UK as of today would in principle continue to apply during the transition period, provided that the Withdrawal Agreement is finally adopted and entered into by the UK and the EU.

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The Immigration White Paper Is Finally Here

The Government has finally published the delayed Immigration White Paper. Here’s a brief summary of the key proposals and concerns, what employers should do next and how our dedicated Immigration team can help.

As one of the fundamental challenges facing UK businesses post-Brexit, it is really important that you have your say on the proposals. There will be a 12-month consultation process so there is time to think about your response but please register your interest here and we will send further guidance and related events in the New Year.

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