Brexit Briefing - July 2019

10 Downing Street

Author Sgt Tom Robinson RLC/MOD
Licence Open Government Licence  v. 1.0
Source Wikipedia 10 Downing Street

Jane Lambert

On 24 July 2019 HMQ invited the Rt Hon Boris Johnson MP to form a government. Immediately, he installed a new team of ministers and advisers with the mission of withdrawing the United Kingdom from the European Union by 23:00 on 31 Oct 2019. Ostensibly the Johnson administration's objective is to negotiate a new withdrawal agreement within the meaning of art 50 (2) of the Treaty on European Union or renegotiate the existing draft but its preconditions for resuming talks are well beyond the negotiating guidelines of the European Council of 29 April and 15 Dec 2017 and 23 March 2018. According to Daniel Boffey and Rowena Mason, the Commission has advised the governments of the 27 member states that "Boris Johnson has no intention of renegotiating Brexit deal" (5 Aug 2019 The Guardian).

Now announcements of that kind are not always to be taken at face value. It is possible for one side or the other to make sufficient concessions to enable a deal to be done.  Parliament may pass a motion of no confidence or even a statute requiring the revocation of the notice of intention to leave the EU in the event of no-deal,. But these are unlikely.  They will require an act of political courage on the part of a sufficient number of remain minded Tory MPs that few have exhibited to date. There will be enormous demonstrations by brexit supporters and possibly even civil unrest.  The recent plunge in the value of the pound suggests that markets anticipate a disorderly brexit, that is to say, leaving without a withdrawal agreement.

And then what?  In Preparing Brexit: No Deal, the Institute for Government warns that:

• It will be much harder and more complex to strike a deal with the EU;
• No-deal means losing deals with many other non-EU countries;
• A showdown in Parliament cannot be avoided:
• Brexit will dominate Whitehall;
• The government will have to support struggling and failing businesses: and
• The Union will come under unprecedented pressure.

Will we gain in a trade deal with the USA what we lose from erecting barriers between ourselves and our nearest and largest market?  Possibly, but unlikely (see What Sort of Trade Deal (if any) could the UK negotiate with the USA? 8 June 2018).  This morning we were flattered by Senator Tom Cotton and 44 of his colleagues in Cotton, Colleagues Pen Letter Pledging to Back Britain After Brexit 3 Aug 2019. But we were exposed to some healthy realism by former Treasury Secretary Larry Summers who made the point that we have very little leverage in any negotiations with the Trump administration

What can businesses and individuals do to mitigate the consequences of a hard brexit? Obviously, take note of the avalanche of guidance notes and emails that are likely from the government in the next few weeks but there are also a lot of useful suggestions in the CBI's What comes next? The business analysis of no deal preparations (see Practical advice on preparations for No deal from the CBI and IfG 1 Aug 2019).

Anyone wishing to discuss this article or legal issues relating to brexit generally should call me on 020 7404 5252 during office hours or send me a message through my contact form. 

European Council Decision of 11 April 2019 extending the Period under art 50 (3) of the Treaty of European Union to 31 Oct 2019

Donald Tusk

Author Platformy Obywatelskiej

Licence Creative Commons Attribution-Share Alike 2.0

Source Wikipedia European Council 

Jane Lambert

Another of the uncertainties that I mentioned in my March Brexit Briefing was the outcome of the special Council meeting of 10 April 2019 which President Tusk called on 29 March 2019 after the draft withdrawal agreement of 14 Nov 2018  was rejected by the House of Commons for the third time.  The reason for the meeting was that the United Kingdom was due to leave the European Union at 23:00 on 12 April 2019.

Even before she was obliged to do so by s.1 of the European Union (Withdrawal) Act 2019, the Prime Minister applied for an extension of the notification of the period provided by art 50 (3) of the Treaty of European Union by a letter dated 5 April 2019.   The European Council referred to that letter in paragraph (8) of the recitals to its decision of 11 April 2019 extending that notice period to 31 Oct 2019 at the latest.

The decision consists of 14 paragraphs of recitals and 2 articles   Art 1 extends the notice period from 12 April 2019 to 31 Oct 2019. Art 2 inserts the condition of holding elections to the Europen Parliament on 22 May 2019 warning:

"This decision shall cease to apply on 31 May 2019 in the event that the United Kingdom has not held elections to the European Parliament in accordance with applicable Union law and has not ratified the Withdrawal Agreement by 22 May 2019."

As the Council also recited in paragraph (9):

"...... under Article 50(3) TEU, the Withdrawal Agreement may enter into force on an earlier date, should the Parties complete their respective ratification procedures before 31 October 2019. Consequently, the withdrawal should take place on the first day of the month following the completion of the ratification procedures or on 1 November 2019, whichever is the earliest. "

As several MPs had urged the British government to disrupt the EU's business if it were granted a long adjournment paragraph (10) of the recitals noted:

"This further extension cannot be allowed to undermine the regular functioning of the Union and its institutions. Furthermore, it will have the consequence that the United Kingdom will remain a Member State until the new withdrawal date, with full rights and obligations in accordance with Article 50 TEU, and that the United Kingdom has a right to revoke its notification at any time. If the United Kingdom is still a Member State on 23-26 May 2019, and if it has not ratified the Withdrawal Agreement by 22 May 2019, it will be under an obligation to hold the elections to the European Parliament in accordance with Union law. In the event that those elections do not take place in the United Kingdom, the extension should cease on 31 May 2019. The European Council takes note of the commitment by the United Kingdom to act in a constructive and responsible manner throughout the extension period in accordance with the duty of sincere cooperation, and expects the United Kingdom to fulfil this commitment and Treaty obligation in a manner that reflects its situation as a withdrawing Member State. To this effect, the United Kingdom shall facilitate the achievement of the Union’s tasks and shall refrain from any measure which could jeopardise the attainment of the Union’s objectives, in particular when participating in the decision-making processes of the Union."

The decision  also made clear in paragraph (12) of the recitals that the withdrawal agreement could not be renegotiated:

"This extension excludes any re-opening of the Withdrawal Agreement. Any unilateral commitment, statement or other act by the United Kingdom should be compatible with the letter and the spirit of the Withdrawal Agreement, and must not hamper its implementation. Such an extension cannot be used to start negotiations on the future relationship."

Anyone wishing to discuss this article or brexit generally may call me on 020 7404n 5252 during office hours or send me a message through my contact page.