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Brexit – what’s next?

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Another loss in Parliament last night seemingly put the final nail in the coffin of Prime Minister May’s Brexit deal and has left the country asking what comes next?

With just over two weeks to go until 29 March, when the UK is due to exit from the EU, Parliament last night held another meaningful vote on Prime Minister May’s plan for withdrawal. It was the second vote by the House of Commons for May’s plan, following an initial vote on 15 January, which resulted in its historic rejection by 230 votes.

While last night’s defeat wasn’t quite as significant, it was voted down with a majority of 149, which still represents a crushing defeat for both May and her plan.

In negotiations with the EU, May had secured some additional changes to the plan that she claimed would have ensured the Northern Irish backstop would only be a temporary measure. However, hardline Brexiteers, most notably the European Research Group, and the government’s coalition partner, the Democratic Unionist Party, were not convinced and joined with MPs who oppose withdrawal from the EU to vote down the deal for a second time.

What happens next?

With this defeat, the question of what happens next is once again wide open. Two further votes are scheduled for this week. MPs will vote today to determine whether the UK should leave the EU without a deal. And if MPs vote against leaving without a deal, another vote tomorrow would decide if Article 50 should be extended and the deadline for the UK leaving the EU delayed. However, the EU would have to agree to an extension to Article 50 and, for this to happen, the UK would have to provide an explanation to the EU as to why it is required. If it’s a case of the UK kicking the can down the road, asking for an extension of Article 50 without offering any new developments to the plan, then the EU is unlikely to look favourably on the request.

Given how up in the air the situation is, we’ve put together a short timeline as a guide to what’s going on and what might come next given the various options available. You can check out the timeline in our Brexit section.

Even if a majority of MPs vote against leaving without a deal on 13 March, it would still happen automatically on 29 March unless something else changes – i.e. Article 50 is extended. May could try to get her deal passed again, but the EU may not see an attempt at getting the same plan passed a third time as a viable enough reason to extend Article 50.

Another alternative would be to renegotiate an entirely new Brexit deal – something similar to the ‘Norway model’ perhaps, that would involve a closer relationship with the EU. However, this is unlikely to be popular with the Brexiteers in May’s party and for renegotiations to be restarted it would require the EU’s agreement and it has demonstrated no appetite for further talks.

This leaves the government with few other possibilities. They can hold a second referendum, which would take money and – above all - time to organise, with experts at University College London's Constitution Unit suggesting that the minimum time would be about 22 weeks. Alternatively, Theresa May could ask MPs to vote to call a general election in order to establish a political mandate for her plan. Two-thirds of MPs would need to support this move and the earliest date the election could be held would be 25 working days after the day the vote is held.

Labour could table another motion of no confidence in the government at any time. If a majority of MPs vote for the motion, a 14-day countdown kicks in. If no government, either the current one or any alternative, can win a vote of confidence during that time, then a general election would be called.

The final option available would be to cancel Brexit. The European Court of Justice ruled that it would be legal for the UK to unilaterally revoke Article 50 to cancel Brexit without the need for agreement from the other 27 EU countries. However, with the current government still committed to Brexit, it's unlikely this would happen without another referendum or a change of government occurring beforehand.

Help facing the uncertainty

All of this demonstrates the incredible uncertainty the UK is currently facing. Clarion has put together a Brexit blog featuring a variety of articles designed to help businesses handle the current confusion. In ‘Operating cash flow – Don’t mention the “B” word’, we look at ways to improve your cash flow in the run up to the UK’s withdrawal from the EU, helping businesses to be as prepared as possible whatever the outcome. We also have a DSO Comparison Tool which allows you to compare your debtor days to other companies in your sector, allowing you to assess your current situation. ‘Brexit – Are you ready for the B-day?’ outlines how to minimise exposure to potentially expensive disputes arising from Brexit. And if you’re concerned about how Brexit might impact any European trade marks or other intellectual property rights you might have, why not read our piece explaining what to expect if we leave without a deal.

These are just a few of the articles you can find on our Brexit blog, so make sure you take a look. And if you’re concerned about how any of these issues might impact you or your business, then please get in touch with Clarion.

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Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.