Following last minute talks in Strasbourg and a late night press conference on Monday (11 March), the House of Commons rejected the UK Prime Minister, Theresa May’s Brexit deal again this evening by a crushing margin of 149 MPs (albeit less than the historic defeat by 230 MP’s back in January).
With just over two weeks to go before Brexit day (29 March 2019) there is still no agreement on what Brexit will be. The possible outcomes are actually widening not narrowing the nearer we get to Brexit day – there have been fresh calls for a second referendum or a general election.
For the next few days, all eyes will continue to be focused on what unfolds in Westminster. There will be a vote on Wednesday (13 March) on whether MPs want a ‘No Deal’ Brexit. Theresa May warned again that the legal default on 29 March is still no deal unless there is an extension or a ratified agreement with the EU.
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 on Thursday (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.
If you have been waiting for greater clarity before planning for Brexit, do not wait any longer. We would recommend businesses across all sectors to:
- 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.
- If you have a No Deal plan, activate it. You should also review how you can scale it back, put it on hold if there is an extension.
- 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).
We have been working with clients from a wide range of sectors, covering all aspects of Brexit planning and have outlined some of the essentials to include in your Brexit plan here.