Limited functionality available
They say a week is a long time in politics, but that’s an understatement in the context of Brexit. Earlier this month we saw historic votes in the UK Parliament to reject the Withdrawal Agreement for a second time, reject the possibility of the UK leaving the EU without a deal, and an instruction to the Prime Minister to request an extension to Article 50. And March’s European Council meeting threw in some additional unexpected developments.
What has happened?
The Prime Minister wrote to Donald Tusk, the President of the European Council, on Wednesday 20 March to request a short extension to the looming Article 50 deadline of 29 March. After eight hours of debate by the leaders of the EU27 on Thursday 21 March, an extension was granted in two forms:
The ‘two-tier’ extension was formally accepted by the UK on Friday 22 March in a letter to Donald Tusk.
What happens next?
We look set for another tumultuous week in Parliament.
The Prime Minister will put forward an amendable motion to the House on Monday 25 March to set out the Government’s next steps. As with previous votes, Members of Parliament will likely propose amendments, and Speaker Bercow will decide which are debated and voted upon. It is possible that MPs will look to force a mechanism to achieve consensus, such as indicative voting.
Depending on the outcome of Monday’s debate, a third attempt at passing the Meaningful Vote is still on the table. If it passes, then Brexit day will be 22 May, and all of the ratifying UK legislation needs to pass through both Houses before then.
Should Parliament reject the negotiated deal for a third time, or a vote doesn’t take place, then the UK has until 12 April to decide what to do. Options include seeking a long extension, leaving without a deal or revoking Article 50.
In any case, new secondary legislation is needed to stop the UK leaving on 29 March, which will take a couple of days to pass in Parliament.
What does this mean for business?
The possibility of leaving without a deal on 29 March has been removed, but the pressure is now firmly back on the UK to find a workable solution, and the future path is impossible to predict.
Doing nothing is still not an option for business as no-deal may still be just weeks away. And whatever their level of preparedness, all businesses still face continued uncertainty.
Businesses with complex contingency plans in place are likely to be frustrated at having to work to new dates, having acted upon instructions to prepare for a fixed leave date – some planning cannot be unwound nor easily replicated. Working to new dates means yet more cost, and more resources diverted from their day-to-day operations.
Others will welcome the additional two weeks as precious extra time to put their plans in place - for example to obtain outstanding registrations or certifications.
One benefit of the extension will be to allow both the UK Government and the European Commission to continue to develop and issue unilateral simplifications, clarifications and easements in event of no-deal (for example, today’s announcement by the UK Government of certain legislative changes on trademark protections in a no-deal situation).
Below are some of the more immediate questions to which business needs answers, and some suggested actions:
>What dates am I working to now?
The result of any third Meaningful Vote on the Withdrawal Agreement will determine whether business needs to work to 12 April, (which might conclude with no-deal or a longer extension) or 22 May (and a managed withdrawal with transition).
What do I do with my no-deal planning?
What should I do next?
Now is the time to call your Brexit leadership team. They need to continue actively monitoring the evolving situation and respond to changes.
How long will this uncertainty last?
The Brexit process continues to be unpredictable and with two new dates in the mix, it’s hard to say how long it will last - to misquote President Juncker, it will last “until the end.” Which all adds up to continued uncertainty for business.
Amanda is Head of Tax & Trade Policy for Deloitte UK. She leads a team undertaking analysis and preparing insights across the spectrum of tax and trade matters including Budgets, technical consultations, trade negotiations and post-Brexit border rules. Amanda has held a wide number of roles during her career including leading client relationships, global representative to the OECD, mentoring and non-executive board roles. As well as previously being a partner at another Big 4 firm, she was in industry at Vodafone plc as global head of indirect taxes and responsible for managing tax value chain and centralisation initiatives. Amanda has an active home life with four children and is also passionate about horses, riding whenever free time permits and supporting the charity World Horse Welfare including volunteering as Trustee and Treasurer for 7 years.