Brexit: the year ahead

Published on
4 min read

We assess the implications of the Johnson deal for the continuing Brexit process. Definitive predictions for 2020 are not possible, but there are already some dates in the diary.

What is different about Johnson’s deal?

As is well known, the key difference between Boris Johnson and Theresa May on Brexit is their vision of the UK’s future relationship with the EU.  That has dictated a new solution to the Irish border conundrum as well as significant differences in the political declaration, which now envisages a more distant relationship.

There are, however, no significant changes to the other key terms of the divorce.  So, for example, the provisions on citizens’ rights and the all-important divorce bill have not been altered.  

The Conservative Party manifesto commits to resubmitting the Withdrawal Agreement Bill to Parliament before Christmas, and to leaving the EU by the end of January 2020, should there be a Conservative majority after next month’s general election.

What are the terms of the latest extension?

The third and most recent extension to the original deadline expires on 31 January 2020.  Like the second extension, it is a “flexistension”, meaning it allows the UK to leave the EU earlier than the final deadline if the Withdrawal Agreement is ratified in time.

This time the terms of the extension state explicitly that it “excludes any re‐opening of the Withdrawal Agreement”.  However, that was the position the EU originally took when it came to Theresa May’s deal. 

Looking ahead to the end of the transitional period

Like the May deal, the revised Withdrawal Agreement provides for a transitional or standstill period until 31 December 2020.  However, due to the passage of time since the original Brexit deadline, we will have lost almost a year of the period originally envisaged.

The Withdrawal Agreement allows the two sides to extend the transitional period once for up to two years.  To trigger this extension, they must agree to do so by 1 July 2020.  The Conservative Party manifesto rules out any such extension, but as always with Brexit, the situation may change.  Certainly, it will be difficult, if not impossible, to conclude a trade deal by 31 December next year, particularly given that, under EU rules, negotiations cannot even begin until the UK has left the EU.

The Labour Party proposals

The Labour Party manifesto includes a number of commitments on Brexit.  It has re-iterated its policy of the whole of the UK staying in a permanent customs union with the EU and maintaining close alignment with the rules of the single market.  It has promised to re-negotiate the Withdrawal Agreement on that basis and then hold a binding referendum within six months of taking office.  Voters would be given the choice of leaving on the terms Labour has negotiated or remaining in the EU.

Brexit in name only?

Both main parties have very different ideas about “getting Brexit done”, but their focus is still on reaching agreement on the terms of the UK’s withdrawal. If that has proved to be difficult, the process of reaching agreement on a new relationship with the EU is likely to be even harder.

This situation has led some commentators to predict an extended period during which the UK continues to stay in the single market while it negotiates a new trade deal.  Assuming the UK does get as far as ratifying the Withdrawal Agreement and leaving the EU, what will happen as the end of the transitional period approaches and no new trade deal is in sight?  Judging by what has happened with the Article 50 extensions, it is likely to be in both sides’ interests to agree to extend the transitional period to avoid the serious trade disruption that would otherwise ensue.  This could be repeated a number of times, leaving the UK continuing to pay into the UK budget for an extended period, but without any say in how its contribution is spent: a Brexit in name only.

Further reading

The Institute for Government has published a series of explainers on the revised Withdrawal Agreement:

 

For information on the likely practical impacts of Brexit on a range of sectors and practice areas, visit Mills & Reeve’s Brexit hub

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