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Bracing for Brexit – 25 days to go!

Peter Legge Peter Legge

The Brexit clock is ticking and there are only 25 days left until the UK will leave the EU.  Brexit will happen on 29 March 2019 unless the UK unilaterally halts the whole thing and revokes Article 50, or the UK Parliament asks Theresa May to seek an extension of Article 50 to delay Brexit and the EU unanimously agrees. 

Last week, pressure from numerous MPs forced the hands of both the UK Prime Minister, Theresa May, when she agreed to offer a vote on extending Article 50, and the Labour party leader, Jeremy Corbyn, when he announced support for a second referendum.

Behind the scenes, the UK government continued to negotiate in Brussels on changes to the ‘backstop’ arrangements in the EU-UK Withdrawal Agreement. There has been little sign of progress but the fact that things have gone quiet publicly may indicate more serious negotiations are taking place.

What happens next?

A lot is set to happen over the next ten days, which we have outlined in our flowchart below:

The second ‘meaningful vote’ by Parliament on the Withdrawal Agreement (which should include any concessions that have been agreed with the EU) should happen on or before 12 March. If UK MPs approve the deal, it will then go back to Brussels again for approval at the EU Council on 21 March.

The second ‘meaningful vote’ by Parliament on the Withdrawal Agreement (which should include any concessions that have been agreed with the EU) should happen on or before 12 March. If UK MPs approve the deal, it will then go back to Brussels again for approval at the EU Council on 21 March.

If Parliament votes against the deal (and subject to any amendments), there is likely to be a vote the next day on whether MPs would like a No Deal Brexit. If MPs vote for No Deal, then the EU Council on 21 March would focus on triggering final No Deal contingency plans and would give businesses two weeks to prepare. If MPs vote against No Deal, then there will be a further vote the next day (by or on 14 March) on extending Article 50, which will allow Brexit day to be delayed beyond 29 March in order to find time to reach an agreement and/or to better prepare for No Deal. This extension, including any terms and conditions, must be agreed unanimously by all EU leaders.

What planning can your business do at this stage?

Based on what our clients are doing across different sectors:

  1. If you have been waiting for greater clarity before planning for Brexit, do not wait any longer. Develop a No Deal contingency plan now. No Deal remains the legal default on 29 March and may well be the outcome at the end of any potential extension.
  2. If you have a No Deal plan, activate it. You should also review how you can scale it back, put it on hold or reactivate if there is a Deal or extension. A strategy for flexing supply chain, production and sales is important. Review what priority orders or seasonal demand could be disrupted if we have No Deal in June 2019.
  3. If you are already implementing your No Deal plan and have flex built in and you know how you will manage any delays, start thinking more long term about the competitive business environment and opportunities and risks of longer term political decisions (e.g. future operating models and efficiency; future trade policy and tariffs – international markets and sourcing; how to attract talent and skills; M&A targets; changes in public spending).