Tuesday, 3 July 2018

Brexit Briefing - June 2018

Author Mikelo 
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Jane Lambert

Despite Lords' amendments and a threatened revolt by a number of Tory MPs, the European Union (Withdrawal) Bill received royal assent and is now law. I have removed my link to the bill and added one to the Act in the left hand column.

But from the government's point of view that was the only progress that it could celebrate.  Members of the Cabinet could not agree on mechanisms for avoiding a hard border with the Republic of Ireland. There were reports that the Rt Hon Michael Gove MP had torn up a report on a policy said to be favoured by the Prime Minister in a fit of pique (see  'Livid' Michael Gove rips up EU customs partnership report 30 June 2018 BBC website). Major employers like Airbus SE and BMW have been drawing up contingency plans for the UK's departure from the EU without a withdrawal agreement (see Hope for the best but prepare for the worst 22 June 2018).

A draft withdrawal agreement has been available since 28 Feb 2018 but many of its provisions are still to be agreed (see Brexit Briefing - February 2018 7 March 2018).  There has been progress as the European Council acknowledged in its Conclusions of 29 June 2018 but there is a great deal more still to do.    It expressed concern that no substantial progress had yet been achieved on agreeing a backstop solution for Ireland/Northern Ireland despite commitments undertaken by the UK in this respect in December 2017 and March 2018.  It also called for work to be accelerated with a view to preparing a political declaration on the framework for the future relationship. 

The lack of progress with such two issues is the reason for the nervousness of businesses like Airbus and BMW.  At the time that the draft was published there was every hope that the parties would reach an agreement before the 29 March 2019 that would allow integrated aerospace and automotive manufacturing across the Channel and North Sea to continue.  As every day passes such an outcome becomes less and less likely.  There is a growing chance that the UK will withdraw from the EU without any agreement at all.

Although most businesses seem to regard withdrawal without agreement as a bad thing some will find opportunity.   Regardless of whether such an outcome would be good or bad it has to be planned for and it is reassuring that many organizations are doing just that,

Anyone wishing to discuss this article or Brexit in general should call me on 020 7404 5252 or send send me a message through my contact form.

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