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Brexit: Uncertainty continues

This was another momentous week in the Brexit process, with the conclusion of further UK and EU negotiations on the ‘backstop’ followed by three crucial votes in the British Parliament.

  • On 12 March, the Prime Minister’s deal was again rejected by a substantial majority.
  • On 13 March, Parliament voted that the UK should not exit the EU without a deal, at any date.
  • On 14 March, MPs voted in favour of the UK requesting an Article 50 extension.

‘Meaningful Vote 3’ is expected by 20 March. If this leads to the Withdrawal Agreement being approved, the extension will be a short technical extension, with the possibility of a longer extension left open if there is no such approval.

An extension needs the unanimous approval of the EU27, and their decision is expected at the European Council meeting on 21/22 March. Obtaining that approval will not be straightforward, particularly if a long extension is requested.

We are still in uncharted territory politically:

  • The ambiguity is such that the options of a delay, no deal and the Prime Minister’s deal are all still on the table.
  • Parliament has demonstrated that there is a majority against many things, including leaving the EU without a deal and a second referendum, but a majority for nothing in terms of a specific course of action to define the UK’s exit terms.
  • A General Election is also a possibility if either the UK Government loses a vote of no confidence or calls a snap election.

The delay requested by the UK will be welcome by some organisations as it avoids the potential disarray of a no-deal exit in two weeks’ time. But an extension, unless short and technical, would prolong the uncertainty for business and add complexity. Some have fully prepared with the 29 March date in mind, so will be frustrated at having to unwind positions in the next few days and with the potential need to plan for a new exit date in the near future.

Leaving the EU without a deal remains a possibility, because it is the default legal position if no extension is agreed. So until there is clarity, which may not emerge until the week commencing 25 March, our advice remains unchanged: businesses should continue to plan for a range of outcomes, including no deal.

To read the update in full, download our March 2019 Brexit update. Also available to download are Deloitte’s Brexit Tactics or Email us for support with your Brexit preparations.

On Monday 18 March Deloitte will host a Brexit webcast to provide an update on the political developments and what this means for business; you can sign up here.

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