Brexit – a guide to the latest developments

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It is unprecedented times in British politics and British history. No longer is it hyperbolic to say that due to Brexit the British government and Parliament has not been so much at loggerheads since the English Civil War in the 17th Century.

In that context all possible outcomes at this stage seem as unlikely as the next.

However, the default position as it currently stands is that the United Kingdom (UK) will leave the European Union (EU) on 11pm on 31 October 2019, unless a further extension is unanimously agreed to by the UK and the EU27.

What are the prospects of a deal?

Boris Johnson, the Prime Minister, maintains he is confident that he can secure a revised withdrawal deal with the EU that removes or materially alters the Northern Ireland Backstop, and which also can secure the backing of Parliament in time for the UK to leave with a deal on 31 October.

The UK Government has published its new proposals for alternative arrangements to replace the backstop, with a view of negotiating a deal for agreement between the UK and the EU27 leaders at the EU Council summit takes place on 17 and 18 October.

If Johnson can pull off a new deal, this would be a major victory, but any new deal must also be agreed to by a meaningful vote in Parliament. There will also be minimal time for a new deal to be implemented in the time remaining, which means we will unlikely know if a deal can be secured in time until the very last minute.

The prospects of an extension

Shortly before the prorogation of parliament that never was, the Benn Act was passed. This forces the Prime Minister, if no deal is reached by 19 October, to seek an extension from the EU27 in the form prescribed by the Act, namely that a new deadline of 31 January 2020 must be requested.

If that request is rejected and an alternative proposed by the EU27, then the Prime Minister must put that alternative to vote in the House of Commons. If the MPs agree the Prime Minister is bound by law to accept the alternative proposal on behalf of the UK.

Johnson has repeatedly said that he would not request an extension, but that he would comply with the law. It is not clear how both of these seemingly contradictory statements can be fulfilled.

The failure to ask for an extension in terms of the Benn Act would be unlawful.

Faced with the prospect that Johnson would not acquiesce to their demands, opposition MPs in Parliament could decide to amend the Benn Act to tighten its provisions and/or provide a mechanism for someone else, most likely the Cabinet Secretary, to make the extension request instead. However, with Parliament now due to be prorogued once again on 8 November 2019 in advance of a Queen’s speech on 14 November 2019, the window of opportunity for MPs to do so will soon have passed.

Time for a general election?

Johnson has repeatedly called for a general election, but parliament has twice voted against one.

The leader of the opposition, Jeremy Corbyn, and other opposition parties, argue that they will not support holding a general election until the Prime Minister has secured an extension and ‘taken a no-deal on 31 October off the table’.

An early general election can only be held if a majority two-thirds of the House of Commons vote for it, or following a vote of no confidence in government.

It is now too late to hold a general election before 31 October without significantly shortening the usual five week campaign period. Therefore a general election does not look likely before the current Brexit deadline has already passed.

Corbyn is not currently minded to call a vote of no confidence for fear of not receiving the confidence of government to form a replacement caretaker government, which would inadvertently trigger a general election. This would mean Johnson would remain as Prime Minister, Parliament would be dissolved, and only reconvene after the election. This would risk Parliament being unable to prevent Johnson from potentially forcing through a no-deal Brexit on 31 October.

If other means of forcing Johnson to make a request for an extension fail, opposition MPs could decide to swallow their differences and back Corbyn (or another MP), as caretaker Prime Minister in order to remove Johnson. This opens up the possibility of a no-confidence vote between the EU Council summit on 17-18 October and the 31 October deadline.

The chances of a 2nd Referendum

To hold a second Referendum, Parliament would need to pass an Act setting out the terms of that referendum.

Currently there does not appear to be a majority in parliament for this to succeed before a general election, although multiple parties appear to be open to holding a referendum subsequently.

No doubt there will be more twists and turns in the next few weeks as government and Parliament seek to fulfil what they see as their respective democratic mandates.

In the meantime, the default position remains a no-deal departure on 31 October.

Businesses and their advisors must ready for that outcome.

Many companies developed no-deal contingency plans in advance of the original Brexit deadline, including securing alternative transport routes, stockpiling products and moving licences to holders in the EU27. Those plans should be revisited and updated.

Some companies ran out of time to implement all the actions identified, so now is the time to prioritise what still needs to be done to safeguard business operations as far as possible in the event of a no-deal exit.


Charles Brasted | Partner mail me |

Andrew Eaton | Senior Associate | mail me |

Hogan Lovells London | 


 

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