Practical advice on preparations for No deal from the CBI and IfG

Dover Harbour

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Jane Lambert

As the Johnson administration's precondition for the resumption of talks on a withdrawal agreement within the meaning of art 50 (2) on the Treaty of European Union is one that the remaining EU member states cannot possibly meet without undermining the raison d'être of the Union, it is imperative for businesses of all kinds and in all industries to plan for no deal.  Though it is often said that there is a majority in Parliament against no deal, the only way MPs can prevent it is by forcing a general election through passing a vote of no confidence in accordance with s.2 (3) of the Fixed Term Parliaments Act 2011 and by the country's returning a government with a mandate to remain.  That will require an enormous act of political courage on the part of remain minded Conservative MPs and a very effective general election campaign by remain politicians.

Two reports that businesses will find useful have been published this week by the Institute for Government ("IfG") and the CBI. 

The IfG's report, Preparing Brexit: No Deal, by Joe Owen and others, starts from the premise that "no deal would not be the end of Brexit."  It adds:

"The UK will be out of the European Union, but the all-encompassing job of adapting to the new reality and building a new relationship with the EU will still be incomplete. The biggest questions Brexit will still need to be settled. The difficult choices that have been unresolved for the last three years will not evaporate overnight on the 31 October. And Brexit will remain the key dividing line in a Parliament in which Johnson’s government has a wafer-thin majority, and one that is constantly under threat."

It maps out the likely political and economic scenario for the period up to 31 Oct, the immediate aftermath and the months following brexit.

The CBI's What comes next? The business analysis of no deal preparations by 15 of the Confederation's specialists in offers more focused business-orientated advice.  Its message is as follows:

"First, it’s time to escalate preparations. Having analysed Brexit preparations by the UK government, the European Commission, EU Member States and companies in the 27 areas of the UK’s relationship with the EU that are most important to businesses, the CBI has concluded that no one is ready for no deal. 

Second, preparations can have a material impact. Working with its member businesses and Trade Associations, the CBI has compiled over 200 recommendations for reducing the harm of no deal. 

Third, many no deal mitigations rely on negotiations between the UK and the EU, which will hold all the political difficulties experienced in talks so far."

Like the  IfG, the CBI warns that "many of the consequences of no deal will be felt for years to come."  Hopes on the part of the government or indeed the long-suffering British public that getting brexit over the line will put the matter to rest are likely to prove forlorn.

There are several other issues upon which the CBI and IfG appear to agree. One is shifting government onto a no-deal footing.  Another is that Northern Ireland is likely to be affected more than anywhere else in the UK and unless a power-sharing agreement on restoring devolved government can be reached between the Democratic Unionist Party and Sinn Fein very quickly legislation will be required to reintroduce direct rule into Northern Ireland.  Far from supercharging the economy, there will be vast swathes of British industry that will require support.

Anyone wishing to discuss this article or the legal consequences of brexit generally (particularly with reference to IP) should call me on 020 7404 5252 or send me a message through my contact form.