Brexit

No deal is not off the table – 2 weeks to go

Following one of the most tumultuous weeks in Parliament in recent history, we are now potentially only two weeks away from Brexit. Here is a summary of the week’s events and what’s coming next.

Tuesday

Parliament rejected Theresa May’s Brexit deal for a second time by a crushing margin of 149 MPs (although this was less than the historic defeat by 230 MPs back in January). Read our update here.

Wednesday

Parliament passed a (non-legally binding) motion rejecting a ‘no deal’ Brexit on 29 March by a majority of 43 MPs. This motion had previously been amended to reject exiting the EU without a deal under any circumstances, by a margin of four votes.

The UK government also announced:

  • In the event of a ‘no deal’ Brexit, it would not introduce any new checks, controls or tariffs on goods at the land border between Ireland and Northern Ireland – see our update here
  • The temporary import tariffs the UK will apply in the event of a ‘no deal’ Brexit (apart from imports across the Northern Ireland border). These eliminate or reduce many of the tariffs payable under the EU’s WTO tariff schedule, but would still result in significant tariffs on the import of meat and dairy products, among other items.

Thursday

Yesterday, MPs passed a motion saying that the government should seek an extension to Article 50 by 413 to 202 votes - a majority of 211. This motion said that:

  • If Parliament votes in favour of Theresa May’s Withdrawal Agreement, the government will request a short extension until 30 June.
  • If Parliament fails to endorse Theresa May’s deal by next Wednesday (20 March), then a much longer extension will be needed, and the UK will have to take part in the European Parliament elections in May.

Earlier on Thursday, MPs rejected an amendment calling for another Brexit referendum by a majority of 249.

What happens next?

Theresa May has indicated she will put her deal to Parliament for a third time next week (on Tuesday 19 March) – in the hope it will go through third time lucky. The government is hoping that Brexiteers will swing behind the deal now they know the alternative is likely to be a long delay (and possibly no Brexit) rather than a hard, no deal Brexit.

An extension to Article 50, including any terms and conditions, would need to be unanimously agreed by the other 27 EU Member States. This is likely to be decided upon at the EU Council meeting on Thursday and Friday next week (21-22 March). It is by no means certain that it will be agreed. The EU may refuse, particularly if is not clear what would be achieved during the extension, or could try and impose conditions that are unacceptable to the UK.

The possible outcomes are shown in our diagram below.

What to do now

Continue to get ready for a no-deal Brexit: No-deal remains the legal default and we are unlikely to know if an extension will be granted until 22 March. This week Michael Barnier said the EU is ready for no deal and that this is now more likely. The UK government has continued to publish its preparations for no deal (see above). Businesses should do the same and not take their foot off any no deal preparations.

We have been working with clients from a wide range of sectors to develop and action their no deal contingency plans. We have outlined some of the essentials to help you plan for no deal here – highlighting six things to look at between now and 29 March to ensure business continuity, compliance and cost management.