Two years since the referendum on EU membership, businesses would be forgiven for thinking there would by this stage be more clarity about what the future holds. The reality though, is that there is much left to negotiate.
Events in June saw MPs and peers voting on a series of tabled amendments to the Government’s flagship EU Withdrawal Bill - the legislation designed to repeal the 1972 European Communities Act, which brought Britain into the European Economic Community (now the European Union). While there were some nail-bitingly close moments from the Government’s perspective, the bill was passed and is now the EU Withdrawal Act.
The Prime Minister ultimately saw off a rebellion by Conservative backbenchers on a proposed amendment to grant Parliament a ‘meaningful vote’ on the outcome of the negotiations. As it stands now, the Government will not be allowed to ratify the withdrawal agreement before Parliament has passed a ‘motion in neutral terms’ to approve of the legislation. At the same time however, the Government is under no legal obligation to follow the instructions of Parliament, and it is up to the Speaker of the House of Commons to determine whether MPs are granted the vote.
Both the Secretary of State for Exiting the EU and the EU’s chief negotiator have stated publically that 75% of the withdrawal agreement has been agreed. Yet there is much that remains unclear. For example, recent evidence given to the House of Commons Exiting the EU Committee suggests there are concerns that the Windrush scandal has dented public confidence in the Home Office to handle a deluge of applications for settled status.
Another significant development in recent weeks was the UK’s publication of a technical note on a proposed temporary customs arrangement. The plan would see the whole of the UK align with the Customs Union until the end of December 2021 at the latest, as the Government expects the long-term arrangements to be in place before then. The British side has criticised the EU’s initial backstop proposal – to keep Northern Ireland in the Customs Union – because it would result in a border in the Irish Sea. The EU has not ruled out the UK’s new proposal altogether, but the bloc is reluctant to grant the UK an arrangement that in their view should only apply to Northern Ireland.
A joint UK-EU statement released in the days after the publication of the UK’s proposal said ‘negotiators commit to making progress as quickly as possible’. It appeared to play down expectations that substantial progress would be made by the time of the June summit. Indeed, the European Council summit saw the EU27 conclude that more work is needed on the matter of the Irish border and further clarity is required on the UK’s vision for the future trading relationship. There was also a hint from the EU27 that, if the UK were to change its red lines, Europe might be willing to consider its offering.
So where does this leave UK business? At the moment all eyes are on the Government’s White Paper on Brexit which is expected to be released in the second week of July. IoD members will be hoping for detail on the UK’s ambitions for the future trading relationship. Business leaders would also like to see which sectors the Government wants regulatory alignment and / or divergence in, as well as proposals for labour mobility arrangements after Brexit.
Here at the IoD, our Brexit work is as busy as ever. I have authored a guide, Business Planning for Brexit, which is available exclusively to members. In the month of July I will sit before the House of Commons Scottish Affairs and Exiting the EU Committees to give evidence on Brexit and trade.
Stephen Martin recently participated in a meeting of the Prime Minister’s Business Advisory Council on Brexit. He was also featured in the Sunday Times in the run-up to the Council summit, alongside representatives of the other main business lobby groups, calling for progress and clarity in the talks.
If you missed our latest Navigating Brexit event – ‘Unpicking Data Flows for Business’ – you can watch the full video and read a summary here.
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