What is happening with Brexit?
What is happening with Brexit?
Deceiving the Queen, a Prime Minister under attack, a government in disarray and high court judges walking out on meetings with the European Minister. This is the current reality of the UK. Brexit is still looming and the deadline of 23.00 GMT on 31st October 2019 is drawing near but still we are no closer to knowing what’s going to happen.
Why is Britain leaving the EU?
Following a referendum on 23rd June 2016, the British public voted to leave the European Union in a hope to regain control of their borders and their money. At the time of the vote, many believed the amount of money it cost to be a part of the EU could be spent more wisely, helping local communities and the UK economy.
However, since the triggering of Article 50 by the former Prime Minister Theresa May, Brexit has been delayed twice already. The main reason for this? The inability of MP’s to agree a deal with the EU. After three rejections, Theresa May’s withdrawal agreement is now finally off the table, but current Prime Minister Boris Johnson isn’t having much luck either in uniting the government and approving an agreement.
Why isn’t a Brexit deal being agreed?
The main sticking point with the negotiations is the ‘backstop’. This refers to the border between Ireland (which is still part of the EU) and Northern Ireland (which is part of the UK). The EU want to stick with the open border between the two countries. This means however, that the UK will still effectively remain inside the customs union if this happens. This is something that pro-Brexiters (people who want Brexit to happen) are greatly opposed to as the UK won’t have ‘fully’ left the European Union.
There is also concern that the ‘Good Friday Agreement’ will be at risk. It was put in place to bring peace between the UK and Ireland over Northern Ireland. Protecting this agreement is still a key objective for the EU according the European Minister for Ireland, Helen McEntee. As well as preventing border infrastructure in Ireland and protecting the economy and the single market including Ireland’s place in it.
Will Brexit happen?
Theoretically, yes. The UK is a democratic country and after voting to leave the EU, negotiations have been ongoing, so Britain can leave with a deal. Since the election of Boris Johnson, there has been more of an urgency to deliver Brexit, with or without a deal. Many MP’s have not been happy with this approach and one party in particular have been very vocal about their stance. The Liberal Democrats, who have been gaining favour recently, have publicly launched a campaign to stop Brexit. Jo Swinson, the leader of the Liberal Democrats, has even said she won’t back Jeremy Corbyn, the leader of the Labour Party, to lead a temporary government as he won’t be able to get a majority.
No Deal Shenanigans
Boris Johnson has said he will ‘get the job done’ and deliver Brexit by the end of October. Since taking his position however, he has lost 7 consecutive votes to do so giving him a 100% failure rate. A major blow to executing his plan was when parliament passed a law designed to stop a ‘no deal’ Brexit and ordering Johnson to request a third extension to delay Brexit until 31st January 2020 – something he has in the past refused to do.
Mr Johnson suffered another defeat after requesting the Queen to suspend Parliament for 5 weeks from 9th or 12th September to 14th October, effectively stifling any opposition to leaving the EU without a deal. After accusations were made that the Queen had been misled by the Prime Minister, the high court ruled that the request was unlawful and would not be enforced.
Following this judgment, many MP’s have called for the resignation of the Prime Minister. He currently remains in power and is determined to leave the EU by the end of October.
Initial reports on Mr Johnson’s current plan suggests the EU is not convinced however, they are open still to negotiations.
Can Brexit be extended again?
The default position is still that the UK will leave the EU on 31st October. Even though the Prime Minister has been ordered to request an extension, there is no guarantee this will be agreed by the 27 remaining members of the EU – the vote needs to be unanimous for the delay to be accepted.
If the UK comes crashing out of the EU on 31st October, it will immediately be removed from the customs union and single market. This means there will be checks on British goods bound for the EU as well as goods being imported from the EU which will cause large traffic jams, will disrupt supply routes and could damage the economy. Some are even speculating the UK will go into a recession should it leave without a deal.
How will Brexit affect UK companies and European companies?
It is likely the supply of goods will be affected if the UK leaves without a deal. If you are reliant on British goods for your business, you may want to consider alternative sources or even stockpiling. You should also check your contracts are in place and up to date. If goods are delivered too late, what will be the effect on your business? It is important to ensure your business is covered in this scenario.
The pound could also crash should the UK fall into a recession. This will affect currency exchange rates but may also affect British companies cash flow and their ability to pay their invoices on time. It is important to check that your contract with UK suppliers also covers this situation.
If you’re not sure then there is still time to put measures in place to safeguard your company. Our international lawyers can help you to mitigate as much risk as possible. We can check your contracts and advise what, if any, changes need to be made. Contact us today to find out how we can help.