By Kent O’Neil, Global Legal Analyst, Newland Chase
It was both an eventful and uneventful week this week in the United Kingdom’s ongoing Brexit saga. Here’s the quick run-down of what did and didn’t happen this week:
- Tuesday’s scheduled Parliament vote on the Brexit separation deal didn’t happen; but because of that, a no confidence vote on Prime Minister Theresa May did.
- PM May did survive the no confidence vote, and she’s safe from any similar challenge for another year; but she didn’t appear to increase her chances of getting her Brexit deal through Parliament.
- Additional trips to Brussels and further conversations on separation between May and EU leaders did happen this week, but what didn’t happen was no surprise – the EU didn’t give any further ground in the separation deal that might satisfy the deal’s critics in the UK.
- Finally, the EU’s highest court did hand down an opinion that the UK could unilaterally withdraw its Article 50 election to leave the EU; but it didn’t result in any real movement among UK leadership to reverse course or at least delay Brexit.
So what's the bottom line for this eventful and uneventful week? Unfortunately, we are no closer to an answer to the question that is on the minds of every business and most citizens in the UK and the EU – What happens on 29 March 2019 when the UK is scheduled to Brexit the EU? And that persistent uncertainty continues to sit as a cloud over both companies’ and individuals’ futures in the UK and in Europe.
Deal or No-Deal?
Chances of a no-deal exit of the UK from the EU are climbing dramatically. As the 29 March Brexit Day grows closer, time is working both for and against PM May and a deal. At the moment, May appears to be holding onto hope that as the deadline nears, the fear of what might happen in a no-deal scenario will outweigh dissatisfaction with the current deal and Ministers of Parliament will vote for an unsatisfactory known deal rather than facing the unknown of a no-deal.
It all hinges on the question – How bad would a no-deal Brexit be? Hardliner Brexiteers hold that no-deal would be relatively manageable – but most business leaders and former remainers disagree, seeing far-reaching negative consequences for the economy.
Parliament’s clear orders to PM May this week was to go back to the EU looking for more concessions in the separation deal to make it more palatable to MPs. She complied, but true to May’s earlier statements that “it’s this deal or no-deal” – the EU had nothing more concrete to offer. It appears the best she may get is some general, non-binding assurances that the EU will timely negotiate in good faith on the future trading relationship to eliminate the need for a lingering backstop measure for the Irish border issue. But such non-binding assurance are unlikely to appease critics in Parliament.
For now, PM May and most Ministers of Parliament say a second referendum putting the question of the separation deal – or potentially whether to go forward with Brexit at all – to the electorate is off the table. But the longer it appears that Parliament is not going to budge on the current deal, the chances of a second referendum increase.
PM May’s current strategy appears to be an end-around Parliament by attempting to build support for her deal among the British electorate. But if she is unable to get movement in Parliament, some observers believe she may attempt to jolt Brexiteers into accepting the deal by threatening them with a second referendum – which many believe could now produce a remain result and reverse the earlier June 2016 referendum.
What Does It Mean for Business?
Hardliner Brexit supporters like to portray a no-deal Brexit as “no big deal” – the UK simply applies World Trade Organisation (WTO) rules and goes on business as usual as it does with all other non-EU countries. Most business leaders and economists fear a no-deal could be a huge shock to the UK and EU economies. Trade rules would change and tariffs jump around five percent overnight on 29 March, and even relatively modest delays in goods moving across the border could result in lengthy border bottlenecks and delays in supply chains. Beyond this, they point to the multitude of contract and legal obligations between companies and consumers that are based on EU law and legal definitions. At risk of disruption would be such diverse sectors as financial services, manufacturing, retail, food, air travel, and electrical power grids. And the impact on the freedom of movement, immigration, and work authorisation of UK and EU national employees cuts across all industries.
What Does It Mean for EU and UK Nationals?
With a separation deal in place, EU and UK nationals generally now know what their immigration and freedom of movement rights will be. (For more see our recent blog “BREXIT DEAL REACHED: What Does It Mean for UK-EU Immigration?”) Without a deal, however, much of what is currently understood as agreed regarding immigration and freedom of movement between the EU and the UK becomes much less definite. The “implementation period” now scheduled to last until at least December 2020 – essentially leaving most of the current immigration and freedom of movement rules in place – is no longer guaranteed. There are a multitude of questions that still must be decided between now and 29 March if the UK and the EU separate without a deal in place.
Similarly, both sides have indicated a commitment to reciprocally protect and preserve the rights and statuses of their respective foreign nationals residing on each side of the UK-EU border after 29 March. However, without a formal deal in place, this is by no means assured.
The latest guidance for EU nationals residing in the UK comes from a 6 December policy paper issued by the UK’s Department for Exiting the European Union. (See our earlier alert here.) In general, this policy paper reflects the UK’s position to essentially maintain the status quo for EU nationals already in the UK on 29 March. However, there are some differences in deadlines and cut-off dates of which EU nationals should be aware in the event of a no-deal Brexit. Those differences are outlined in the enclosed chart. Note that the major difference is the absence of an implementation period – thus shortening the deadline for EU nationals to act in order to obtain settled status.
Readers are cautioned that the current situation is still extremely fluid and subject to change over the coming weeks and months. Throughout this Brexit process, Newland Chase has endeavoured to prepare our clients for these unprecedented changes in corporate mobility and immigration in the UK and the EU. All companies are encouraged to have contingency plans in place in the increasing likelihood of a no-deal Brexit.
Continue to follow our alerts and this blog to keep on top of these fast-changing developments in the UK and the EU on the Newland Chase website at blog.newlandchase.com. Or sign up at the bottom of this page to have them conveniently emailed to you once each week.
For immediate concerns, you are always encouraged to reach out to your Newland Chase immigration specialist for detailed guidance. Companies with general enquiries are invited to email at firstname.lastname@example.org.
Kent O’Neil is a Global Legal Analyst and frequent writer and speaker on international business and global corporate mobility for Newland Chase. Kent received his Juris Doctor from Penn State’s Dickinson School of Law and a Bachelors in Economics from Clarion University. Prior to joining Newland Chase, he worked in both private practice and in-house for a multinational corporation operating across North America, Europe, Asia, and the APAC region. Now based in the U.S., Kent has lived and worked as an expat in Pakistan and the Philippines.