An update on Brexit

We have all hoped for some degree of certainty as time runs out before the Brexit deadline. The dramatic events in the House of Commons last night have provided some clarity over the future direction of any debate in both Parliament and the EU.

What do we know?

  • The Government lost its vote on the Withdrawal Bill by 432 votes to 202. This is the biggest Parliamentary defeat in over 100 years.
  • The Labour party has tabled a vote of no confidence in the Tory Government. The no confidence debate will be held on Wednesday 16 January from 1pm with a vote at 7pm.
  • If the Tory Government survives a vote of no confidence, Theresa May will hold discussions with all parties in an attempt to find common ground that could command a majority of MPs.
  • The ‘Plan B’ that emerges from those talks will be presented to the House of Commons, as required on Monday 21st January.
  • The EU has ruled out reopening negotiation of the Withdrawal Agreement and I understand has also confirmed that an EU Summit will not be held this weekend, in advance of the presentation of Plan B to the House of Commons on Monday.

The EU commented as follows:

‘We will continue the EU’s process of ratification of the agreement reached with the UK government. This agreement is and remains the best and only way to ensure an orderly withdrawal of the United Kingdom from the European Union.’

Donald Tusk, President of the European Council, sent out the following tweet:

‘If a deal is impossible, and no one wants no deal, then who will finally have the courage to say what the only positive solution is?’

What conclusions can we draw?

  • The EU is holding firm and Donald Tusk still hopes we won’t leave the EU.
  • It is inconceivable that any minor concessions on the Northern Irish Backstop (maintaining no border between Northern Ireland and the Republic of Ireland) could overturn such a crushing defeat. It would require a wholesale rewrite of the Withdrawal Agreement, something which is very hard to foresee given the lack of clarity in what Parliament will accept, as opposed to what it has rejected. Why would the EU negotiate with a party leader that has no mandate?
  • The Labour Government will almost certainly lose the vote of no confidence, as the opposition parties do not command a majority.
  • Parliament seems clear that a ‘no deal Brexit’ is unacceptable. If neither the Withdrawal Agreement nor a no deal Brexit can secure a majority, we are left with three alternatives:
  • A softer Brexit, which can command a majority in the House of Commons and should secure EU agreement. Norway, Canada and Turkey have been used as examples;
  • A People’s Vote to determine what would now be acceptable to UK voters. The challenge is agreeing the questions on the ballot paper;
  • The UK unilaterally withdraws its enactment of Article 50, indefinitely delaying its exit from the EU. This would be an acceptance that there is currently no satisfactory way of leaving the EU.

I’ll leave the final word to Dr Adam Marshall, director general of the British Chambers of Commerce:

There are no more words to describe the frustration, impatience, and growing anger amongst business after two and a half years on a high-stakes political rollercoaster ride that shows no sign of stopping. Basic questions on real-world operational issues remain unanswered, and firms now find themselves facing the unwelcome prospect of a messy and disorderly exit from the EU on March 29.’

If you would like to discuss this in more detail please contact Jonathan Main or call us on 01772 821 021.