‘Brexit Day’ was scheduled for March 29th, 2019. Hard to believe now, but some in the UK (though not Accordance!) had made plans for festivities and street parties: bunting was to be unfurled, joy was to be unconfined. The Prime Minister, Theresa May, assured (or warned) the House of Commons over a hundred times that there would be no delay.

Nevertheless, it won’t have escaped your attention that the UK remains a member of the European Union. Members of Parliament refused to ratify the Withdrawal Agreement the Prime Minister had negotiated with the EU; they also took steps to block any attempt by the Government to Brexit with ‘no deal’. The UK has now been granted – by the EU! –  an extension to article 50 (the two-year legal mechanism by which the UK plans to leave the EU) of up to six months. This sets up a new ‘no-deal cliff-edge’ at the end of October 2019: Halloween.

So why didn’t the UK depart the EU on March 29th? MPs voted to trigger article 50 in 2017, thus pitting the UK’s negotiators against a ticking clock; most sincerely believed that the UK referendum result should be honoured, and within a two-year period.

The problem, as it turned out, was that there was no agreement about what ‘leaving’ or ‘Brexit’ actually meant.

All the issues that have been so furiously and interminably debated in Parliament – the Irish border; a customs union; membership of the single market; the right to sign new trade agreements beyond Europe; the balance between national sovereignty and the national economic interest; and the known unknowns and unknown unknowns of a ‘no deal’ – remained unsettled live controversies.

The Prime Minister had claimed that ‘Brexit means Brexit’. But the fateful decision of the Vote Leave campaign to deliberately not specify, for strategic reasons, a preferred type of Brexit (the key question being how closely economically aligned the UK would be to the EU) meant that her intended spine stiffening rhetoric collapsed into a tautological black hole.

‘Hard’ Brexiteers in the Conservative Party reject the Withdrawal agreement for ‘not delivering Brexit’. But the majority of Parliamentarians refuse to countenance a no-deal Brexit, fearing serious economic and social consequences.

If UK parliamentarians were frightened enough of no-deal to enforce the delaying of Brexit in March, there is no obvious reason why they will be any braver in October. For most MPs, a no-deal Brexit seems to have a lot more trick than treat about it. Yet it isn’t clear whether they could stop it again.

We don’t even know what the true positions are of the country’s leading political parties. They are making a show of trying to come to an agreement about an acceptable version of the Withdrawal Agreement, but no one is sure how serious they are. Will the Conservatives eventually adopt a pro no-deal stance, in order to incapacitate the new Brexit Party? Will Labour be forced by its members (against the will of its leader) to offer a second referendum on the issue as a whole?

Some commentators believe that a no deal exit in October is now almost a foregone conclusion. Others are equally confident that the UK will never leave the EU and are already speculating about an ‘extension to the extension’.

If the Withdrawal agreement is passed, companies trading between the UK and the EU will almost certainly have at least a couple of years (and probably much longer) to ready themselves for the Brexit end-state. It will be business as usual for the foreseeable future.

But it would be prudent – indeed it is essential – for businesses to prepare for a sudden no deal at the end of October. No major modern economy has ever yet left a complex integrated trading bloc. Regulations and structures could change overnight; to be sure of being able to continue trading, businesses must do their best to understand the strange new world they could be entering. And given the economic pressure a hard Brexit would cause all around Europe, we can expect cross-border business taxation to become a highly sensitive and visible issue.

By |May 1st, 2019|