Following the “flextension” to 31 October 2019, the UK has seen a change in Prime Minister, an unlawful prorogation of Parliament, an attempt to provide a solution to the Northern Ireland backstop in the Withdrawal Agreement, and high profile litigation relating to Brexit. Despite the EU stating on numerous times that the Withdrawal Agreement, of which the backstop is part, is not open for renegotiation within the treaty text, as 31 October approaches there seems to be some willingness to relax this stance, in return for compromise from the UK.
So, with fewer than 20 days to go until the UK is scheduled to leave the EU, what can we expect as we move closer towards the 31 October deadline? What might happen in Parliament when it sits on 19 October? Is the Prime Minister backed into a corner? And will 31 October remain the deadline or will there be a further extension?
As we approach the third potential date for Brexit, the possible outcomes appear to be unchanged, although current tunnel negotiations between the UK and the EU are ongoing and it is hoped that these may result in a deal. If there is no deal we may see the following:
a further extension;
a general election; or
a second referendum.
A revised deal?
In November 2018 the EU and the UK agreed the terms of the Withdrawal Agreement and the Political Declaration. However, two meaningful votes (on both the Withdrawal Agreement and the Political Declaration) and a vote on the Withdrawal Agreement alone failed to secure the support of Parliament. There was an apparent impasse, as the European Council indicated that the Withdrawal Agreement was not open for renegotiation, although the Political Declaration could be redrafted, but there was no support for the deal in Parliament.
In early October, Boris Johnson presented a revised proposal for the Withdrawal Agreement, which focused on the Northern Irish backstop - one of the problematic areas of the deal. This proposal, which was dubbed “two borders for four years”, was described as a solution “which should be acceptable to both sides and which delivers the objectives of the Belfast (Good Friday) Agreement”. In summary, the original UK wide backstop would be replaced by a Northern Ireland only backstop, with Northern Ireland staying in the EU Single Market and in a regulatory area with RoI. However Northern Ireland would leave the EU Customs Union, thereby creating a customs border with RoI. This means that there would be a regulatory border in the Irish Sea, necessitating regulatory compliance for goods passing between the UK and Northern Ireland, as well as a customs border with RoI. The Northern Ireland Assembly would be able to vote for Northern Ireland to stay in the all Ireland regulatory zone and maintain two borders, or to accept a harder border with the RoI and move closer to the UK. This vote would be before the proposals take effect (from January 2021 as the Prime Minister does not intend to request an extension of the transition period), and every four years thereafter. This element would be problematic until there is an Executive in Northern Ireland, and it would also give the DUP the right of veto.
There was a very mixed reaction both from the UK and the EU to those proposals and, after a period during which claim and counterclaim by the UK and the EU was made, to try to move the blame to the other party for the failure of the negotiations, there were reports of a positive meeting between the Prime Minister and the Taoiseach, Leo Varadkar leading to further intensive negotiations, which are now in progress between the UK and the EU to secure a deal ahead of the European Council meeting on 17/18 October. However, whether there will be a deal, and what any deal will look like remains to be seen. There is also the possibility that the EU may hold a further emergency summit in due course.
It is likely that the Prime Minister’s proposals for a solution to the Northern Ireland backstop will not, as they were initially presented, for the basis for a deal, but whether a deal is reached based on the discussions with Varadker, or whether further concessions are made by either side should be clearer after the European Council meeting in October. There is also the possibility that the Withdrawal Agreement agreed by Theresa could be resurrected.
What happens if a deal is agreed?
If a deal is agreed between the UK and the EU at the European Council Summit on 17 October, this could then be put to the vote in the Commons on 19 October, and if the deal received the support of the House, there would be no need for the Prime Minister to seek an extension to the Article 50 period (see below). Alternatively the Government could put the original Withdrawal Agreement back to the Commons for a vote on 19th perhaps having secured further assurances from the EU in the Political Declaration that they do not wish the backstop to come into force. However, in this case the Irish backstop would be in the Agreement as originally drafted and at present it is hard to imagine sufficient support for this.
If there is support for a deal, there will still need to be a meaningful vote, as required by the European Union (Withdrawal) Act 2018, which will be a single motion covering both the Withdrawal Agreement and the future framework (the Political Declaration). In addition, an act of Parliament is also required (the Withdrawal Agreement Act) containing the provisions for implementing the Withdrawal Agreement, before the Withdrawal Agreement can be ratified. The Withdrawal Agreement must also be ratified by the European Union, and it is hard to see how this can be achieved before 31 October, and so in this situation it is likely that a technical extension would be needed.
Once ratification has taken place, the UK will be able to leave the EU but the date of exit is currently uncertain, as 31 October still remains the default exit date. At this stage the transition period will come into force to allow the UK and the EU to negotiate the future economic partnership, and for businesses and individuals to plan for the future, whilst continuing to operate under EU rules. The transition period in the original Withdrawal Agreement is set to end on 31 December 2020, subject to a two year extension. There is no indication as to whether the transition date would be further extended, but the Prime Minister has indicated that, in the event of a deal, the transition period should end on 31 December 2020.
Once a deal has been agreed and ratified by both sides, it is expected that the second phase of negotiations around the future economic partnership would start immediately.
What else might happen in Parliament on 19 October?
Unusually a sitting of Parliament has been called for 19 October - the first time that Parliament will have sat on a Saturday since 3 April 1982, at the start of the Falklands conflict, and only the fourth Saturday sitting in 80 years.
As has been referred to above, there is the possibility that any deal agreed between the UK and the EU might be voted on in Parliament on 19th October. However, as business for the day has not yet been announced, and there is as yet no progress on a deal, anything could happen.
It is possible that the Government could seek the approval of the House for the proposals on the backstop, in an attempt to persuade the EU to support this. Alternatively the Prime Minister would be able to seek approval for the next steps in the event that a deal has not been reached (e.g. leaving without a deal, revoking Art 50 etc).
There have also been suggestions that the opposition might seek to take control of the order paper, or that the Government, having sought an extension, could table a motion for an early General Election, a move which has been rejected twice, with the Opposition indicating that they would not support such a motion until an extension had been requested.
Might there be an early General Election?
Boris Johnson has tried twice to secure the support of the House for an early General Election, but each time failed to secure the required two thirds majority required by the Fixed Term Parliaments Act 2011. Whilst it was clear from the party conferences that the parties are gearing up for a General Election, Labour have indicated that there would be no support for an early election until after a deal has been reached, or an extension sought. However, the Government has given the Labour Party approval to have acces talks with the Civil Service, a usual precursor to an election.
Following the Queen’s Speech on 14 October, which set out the Government’s future legislative programme for a post Brexit UK (and which has been seen by some as the Conservative party manifesto), there will be a vote on the legislative programme in the week commencing 21 October. It is expected that the Government will be defeated (which would be the first time this has happened since 1924). In this event, there would be no requirement for the Prime Minister to resign, but there may then be a vote of no confidence in the Government which if carried, would leave 14 days for an alternative Government to be formed that would be supported by the House. Failing this, there would be a General Election.
What about a second referendum?
Whilst a second referendum has been discussed, such an approach has not had the approval of the House. Support has been growing for a second referendum in the Parliamentary Labour Party, and from Jeremy Corbyn, and it has been suggested that any deal could be subject to a referendum, or that a General Election would be tantamount to a second referendum.
Were a second referendum to be held, this would require an extension to the Art 50 period. It is estimated that a referendum takes at least 22 weeks from start to finish, as legislation needs to be enacted, questions need to be agreed and assessed to ensure that they are unambiguous and unbiased, and there needs to be a period of campaigning before the vote itself. There are suggestions that a referendum could be organised in as little as twelve weeks, but this seems ambitious.
Note that the results of the European Parliament elections in May could indicate that a second referendum may serve to confirm the result of the 2016 referendum, rather than indicating a change of direction..
No deal by 31 October - might there be an extension?
Since taking office the Prime Minister has focused on the UK leaving the EU on 31 October, with or without a deal, but Parliament has voted against a no deal Brexit. Further the European Union (Withdrawal) (No 2) Act 2019 (“the Benn Act”) is designed to prevent a no deal exit, by requiring the Prime Minister to seek an extension to 31 January 2020 if no deal has been agreed by 19 October, and the House of Commons has not voted in favour of a no deal Brexit.
Whilst the Prime Minister is not above the law, and is bound to comply with the requirements of the Benn Act, there is speculation that a way will be found to get round the Act. There have been a number of ways suggested, but it is unlikely that there would be support for anything that was felt to be contrary to the spirit of the law following the Supreme Court’s ruling on the unlawful prorogation in September. However, Andrea Leadsom has suggested that if a letter under the Benn Act is sent, it would be followed up by a second letter indicating that an extension was not what the UK wants. It has also been suggested that the Benn Act could be amended to allow someone to request an extension to Article 50 in place of the Prime Minister, and the Court of Session in Scotland is to decide on 21 October whether it could effectively sign the letter on the Prime Minister’s behalf, should he fail to send it. At this stage much of this is speculation and these routes are unconstitutionally tested. Of course, even if a letter requesting an extension is sent, the European Council still have to grant a further extension.
If no agreement on a deal has been reached by 31 October, and no further extension granted, the default position is that the UK leaves the EU without a deal. In this scenario, there would be no transition period and the numerous no deal statutory instruments will come into force, transferring EU legislation to ensure that the UK has a functioning statute book from 1 November.
In the absence of a transition period, businesses, individuals and public bodies will have to react immediately to the changes, and implement no deal contingency plans. The UK would revert to World Trade Organisation rules on trade (apart from where free trade agreements have been ‘rolled over’) and any exports to the EU would be subject to EU tariffs, as well as authorisation and certification. On 8 October the Government published its revised tariffs and quota arrangements for the first 12 months after a no deal exit, which will be welcome news for some businesses.
In this case it is likely that negotiations with the EU would begin not begin for at least six months to establish a new relationship between the UK and the EU in the future. Consequently, significant disruption should be expected, at least in the short term.
Although “no Brexit” was an option raised by Theresa May, this has not been an option presented by Boris Johnson, who is holding on to his “deal or no deal” rhetoric. During the party conference season, it was Jo Swinson, leader of the Liberal Democrats, who vowed that a Lib Dem government would revoke Article 50. However, the means by which this might be done is unclear.
In December 2018 the Court of Justice of the European Union confirmed that a member state could revoke its notification under Article 50 to withdraw from the EU, and that there was no requirement to seek the permission of the other member states. However, the withdrawal must be unequivocal and unconditional, so cannot be used as a way to ‘buy’ additional time for negotiation either with the EU or domestically.
Interestingly the revocation decision must be taken ‘in accordance with ... constitutional requirements’. Whilst the Prime Minister could use prerogative powers to revoke Article 50, there are legal arguments against this and it might require a vote in the House of Commons. If there were to be a Lib Dem Government it is assumed that there would be a majority for a motion in the House of Commons to revoke Art 50. Politically it may be necessary to hold a second referendum to confirm this course of action, but of course the outcome of any second referendum may be the same as the first.
Whilst there is some political momentum for this option, this has not yet manifested in a decisive majority in Parliament despite opportunities earlier this year for it to do so. Businesses should not therefore be planning on the basis of this scenario at this point.
So what next?
Which of these scenarios plays out is not clear at this stage, and things are likely to develop quickly around the European Council meeting on 17/18 October, and at the sitting of the House of Commons on 19 October. There is still uncertainty and no time for complacency as time is running out. Over the next days and, it is vital that all businesses keep an eye on developments and, for now at least, continue to prepare for the ‘default’ option of a no deal exit on 31 October.