Apologies for the bad language.  I am quoting what several business people have said to me today.

The last three days have been Brexit chaos, with no one knowing what happens next: hourly reports of ministerial ructions, ultimatums, a Prime Minister losing control of parliamentary process and cabinet authority, and warring political factions.  This is the new norm in British politics, but the start of this week was exceptional even for recent weeks.  Today we were given some clarity of what happens next, courtesy of a letter Theresa May, the UK Prime Minister, sent to Donald Tusk, the President of the EU, and his response.

Nine days before the UK is due to leave the EU, here are the bare essentials to help you navigate the coming days:  

1.      The UK government has asked the EU for an extension of the article 50 process (the legal process for leaving the EU) until 30 June; which would delay Brexit for three months.  The extension is needed because even if MPs approve the Withdrawal Agreement in the next few days, it the needs to be translated into a full Act of Parliament, which will take longer.

2.      The EU will consider the UK’s request at its summit tomorrow and Friday.  The President of the EU has indicated that they are likely to agree to a short extension on condition that next week the UK Parliament votes in favour of the Withdrawal Agreementpreviously agreed between Theresa May and the EU (this is the agreement MPs have already voted down twice).  EU agreement to an extension is not a given:  it requires a unanimous decision by all 27 EU leaders and several countries have indicated that their support should not be taken for granted.

3.      A vote in Parliament on the Withdrawal Agreement is likely to take place on Monday  (4 days before the UK is due to leave the EU) . The reason we did not have such a vote this week is because the government has not persuaded enough MPs to back down from their opposition to this agreement; this has not changed (and some positions have hardened) but there are a few more days for MPs to be persuaded.

If MPs do approve the Withdrawal Agreement at the third time of asking next week, and if the EU agrees to extend article 50 for a short period (to enable the full legal ratification of the agreement), then we will have a further period of two or three months before the UK leaves the EU.  During this period the Withdrawal Agreement will need to be turned into a UK law, and this will provide ample opportunities for continued Brexit shenanigans by MPs.  This two- or three-month extension period is likely to be very similar to the last three months of chaos politics in the UK, with no certainty of the outcome unless and until the Withdrawal Agreement is incorporated into UK law (to the satisfaction of the EU).  A no-deal Brexit remains a distinct possibility at the end of this extension period.

If MPs reject the Withdrawal Agreement next week, then we really don’t know what will happen next.  MPs may propose alternative solutions; the EU may hold an emergency summit and could agree a longer extension to article 50; or we might have a no-deal Brexit next Friday, with the UK leaving the EU with no agreement in place and no transition at 11pm on 29 March.  

A no-deal and no-transition Brexit on 29 March is currently the default – to prevent this requires legal actions by the EU (to extend article 50) and the UK Parliament (to change the date of Brexit currently set in UK law).

Theresa May also said tonight that she would not delay Brexit beyond 30 June. The implication is that if MPs don’t vote for her Withdrawal Agreement, she will either resign or pursue a no-deal Brexit.

In summary there are a few possible outcomes:

  • 29 March: UK leaves the EU with no-deal 
  • 30 June (possibly end of May): UK leaves the EU on basis of the withdrawal agreement or with no-deal
  • One to four years’ time: an alternative deal or no-deal Brexit or no Brexit.

We will have a better idea on 29 March; possibly not before then.  This is a high stakes political game of poker, which will go down to the wire next week.

No-deal Brexit remains a very real possibility – whether next week or in three months.  Around a third of mid-market businesses have already pressed the button on their no-deal Brexit business continuity plans. Around a third have contingency plans in place or in development. And a third do not have any Brexit plans.  

If you are not yet ready for Brexit: clear your diary, get your team together and get onto it; it is not too late, and our Brexit Essentialsguide provides some actions you can still take.