Welcome to our new Brexit Blog Series. As you know, Brexit is dominating much of the world’s legal and political conversations as the global media shines a spotlight on the uncertainty shrouding Britain.
But, why is Brexit so important and such a hot topic at the moment? What does Brexit mean to you and your UK business?
‘Brexit Day’ – 29th March 2019 – is when the UK’s two years’ notice under Article 50 comes to an end and the UK will formally leave the European Union (EU). From which point, the two-year transition period then begins.
During the Brexit Blog Series, we will be exploring key topics and rounding-up Brexit news, with expert guest bloggers including leading business owners, academics and lawyers.
So, keep your eyes peeled!
For the first in our series we take a look at the implications of a no-deal scenario, and what you can do to prepare.
What does a ‘no-deal’ Brexit really mean?
If a ‘no-deal’ Brexit occurs, the UK will leave the EU without a withdrawal agreement – i.e. a complete break away from the EU without a formal arrangement in place to define the future relationship between the UK and EU. Amongst a range of matters, there will be no agreements regarding trade and market access, the Northern Irish Border and the citizens’ rights in the UK and EU.
Implications of a ‘no-deal’ Brexit
One of the main implications of a ‘no-deal’ Brexit is uncertainty. Beyond ‘Brexit Day’, the UK ceases its membership of the EU and will no longer be part of the bloc.
In this instance, the UK will revert to World Trade Organisation (WTO) rules and will be required to pay external tariffs to the EU. As a result of these extra costs, goods may be more expensive to buy.
Recently, the government has spoken to pharmaceutical companies and the NHS to stockpile medicine supplies to prepare for a ‘no-deal’ scenario.
It has also been speculated that some businesses may move out of the UK and open offices within the EU to avoid border charges and long delays. Companies such as EasyJet, Goldman Sachs and Barclay’s to name but a few, are already looking to make the move before Brexit.
The Irish border is another hotly contested issue. Without a deal with the EU, there will be pressure to implement a hard border for customs and immigration control between Northern Ireland and the Republic of Ireland.
Currently, UK and EU citizens enjoy free movement within EU member states. A ‘no-deal’ Brexit would heighten immigration control and checks at borders. There will be uncertainty regarding the right to live and work for EU citizens living in the UK and similarly, UK citizens living in the EU.
Many businesses rely on EU migrant workers, this has the potential to significantly impact and damage their workforce.
Are there any advantages?
The UK will no longer pay a contribution to the EU budget. This means this money could potentially be invested in the UK.
Some believe that a ‘no deal’, clean break from the EU will be advantageous as the UK will have a clean slate and gain full control of trade, legislation and immigration.
What should I be doing now?
UK organisations must make the necessary preparations to ensure business-as-usual operations in a ‘no-deal’ scenario.
This means making a contingency plan, auditing your supply chains and putting backups in place to minimise customs delays and costs.
Do you have any EU migrant workers? Consider your workforce and keep an eye on employment law and policies.
If your business transports goods across borders, seek Authorised Economic Operator (AEO) status, which registers you as a ‘trusted trader’ and will allow for faster clearance at borders.
Finally, look up the government-issued guidelines for ‘how to prepare if the UK leaves the EU with no deal’.
Brexit in the news
Chequers plan or no Chequers plan? It seems as though UK Prime Minister Theresa May is committed to pushing ahead with her controversial Brexit plan with the EU and the rest of the world. The deal which creates a ‘Common Rulebook’ with the EU, aligning the UK with the single market.
Meanwhile, Labour Leader Jeremy Corbyn confirmed his Party’s position on Brexit at the Labour Party Conference in Liverpool last week – focusing on key rights and protections, jobs and the economy – rejecting the possibility of a ‘no-deal’ Brexit, and labelling it the worst possible scenario.
Finally, Theresa May announced yesterday that ‘EU migrants won’t get any special treatment’, ending the free movement of people and proposing a skills-based system. Following Brexit, only those EU citizens with high skills are to be considered to migrate and work in the UK, leaving low-skilled workers behind.
What a week for British politics! We would love to hear your thoughts and opinions.
P.S. Keep an eye out on our upcoming ‘Brexit: What impact will Brexit have on UK businesses’ whitepaper available to download soon.
Want to know more about Brexit and the impact on UK businesses? Watch our FREE on-demand webinar