Five Things to Know About Brexit Before the Holiday

19 Dec 2018

Policy area: Brexit

Our Head of Insights & EU Engagement, Patrick Brown provides our latest blog, sharing five points about Brexit before the festive season. 

 

  1. Article 50 is Unilaterally Revocable by the UK, but only the EU27 can Grant an Extension if Requested - with 100 days to go before Brexit day under the standard Article 50 timeline, and only just over 40 sitting days in Parliament, the Prime Minister’s strategy of postponing the vote on her Brexit Deal to week commencing 14th January makes the heart beat a little faster. We know that May’s Deal likely does not command a majority as things stand, but the proliferating alternatives present an unknown and threaten to fractionate coalitions rather than to build them. Yet, it is clear that there is an increasingly vocal majority within Parliament against No Deal. In game theoretic terms, Number 10 may be counting on the urge among parliamentarians to ‘satisfice’ when the chips are down, eschew what they wish to avoid and vote for that which maximises their utility based on the information they have.
     
  2. The Immigration White Paper is Out - Wednesday’s long-awaited immigration White Paper scraps the cap on skilled workers from the EU and elsewhere. Yet there will be a consultation on a minimum salary requirement of £30,000 for skilled migrants seeking five-year visas. This last proposal was the reason for the delay to the publication of the White Paper.
The new system will apply from 2021 in phases. The ending of free movement was a key plank of the Prime Minister’s Brexit deal, but it will still need to comply with the terms of any future trading arrangement with the continent. The Home Secretary has said today that the system will apply ‘deal or no deal’. On balance, the White Paper proposals are ‘mostly harmless’ in respect of skilled workers but the proposed visa system for low skilled workers may add a hurdle for some types of construction worker on which the UK real estate industry depends to deliver its pipeline. Nevertheless, the Government has certainly shifted its position.
     
  3. Managed No Deal Looks Hopelessly Optimistic as a Concept - some Brexiteers have spoken of a Brexit option which involves a series of mini-deals hatched in short order in the event of No Deal, which would permit some UK/EU arrangements to endure. The release of the European Commission’s own No Deal plans today, rumoured to have been delayed since Salzburg, indicate that the EU is only willing to consider bare bones and time limited arrangements to mitigate uncertainty and delay.
Measures proposed by the Commission include permission for British airlines to operate flights into and out of the EU, but not within it and road freight to be permitted into the EU for a 9 month period but on terms that are less favourable than at present. UK financial services in some areas, such as derivatives, would be recognised as equivalent for 1-2 years. However, this generosity is likely to be contingent on cooperation from the UK Government, including in the area of citizens rights. As these arrangements would be able to be withdrawn by the Commission without prior consultation with the UK, they would offer little practical assurance to business.
     
  4. The Government has ramped up its own no deal plans - the Government has sent letters to 140,000 firms urging them to plan ahead for no deal, and 100 page information packs are due to be distributed on Friday. The Government has made provision for around £2bn to be spent on Brexit preparations and 3500 troops have been put on standby to be a flexible resource to be drawn upon by Government Departments as needed. Yet recent appearances by Permanent Secretaries of the Treasury and Defra have both yielded concerns that No Deal contingencies will not be in place on the UK side glitch free from day one. Contrary to early rhetoric from the Government, it does seem that a deal is better than no deal.
     
  5. Government’s attention cycle may be dwindling - due to the above no deal plans, civil servants are said to being drawn from other duties to help. David Lidington, The Times reports has been asked to identify policies that will be shelved to free resources in the case of no deal.