Following events in Parliament tonight, the UK will not leave EU on 31 October with a deal.  

Boris Johnson, the British Prime Minister, said that the government will now:

  • accelerate no deal planning, and
  • speak to EU leaders about their intentions on the UK request for an extension to the Brexit deadline.

Donald Tusk, the EU President, has said he will recommend to EU leaders that they should agree to a Brexit extension to 31 January 2020.

Here’s a recap of what has happened over the last few days, and what this means for business.

Brexit:  the last 72 hours

Three days ago, MPs withheld their support for the new Brexit deal, until the deal has completed full ratification.  

This triggered a request from the UK Government to the EU for an extension to article 50 (delaying Brexit) to allow time for full ratification, avoiding the risk that this might not be completed before 31 October.

Ratification requires:

  • the UK parliament to pass a law implementing the Brexit agreement and
  • the European Parliament to approve the agreement.

The European Parliament has said it will vote on this once the UK Parliament has completed its legislative proceedings.

The UK Government introduced draft legislation (the Withdrawal Agreement Bill) yesterday to ratify the agreement.  Today (Tuesday, 23 October) MPs voted in favour of its ‘2nd reading’ – this means that MPs then scrutinise the legislation in detail in ‘committee stage’.

This is the first time MPs have voted in favour of any Brexit proposal.  This showed that the agreement may be approved by MPs – albeit they would seek to amend it in the committee stage.

Today the Government also proposed that MPs’ scrutiny should be complete by Friday (less than 3 days full discussion) – and the Bill would then be passed to the Hose of Lords.  This very truncated timetable was designed to complete ratification before 31 October.

MPs voted down this timetable, defeating the government – and called for more time to debate the Withdrawal Agreement Bill.

In response the Prime Minister stated that the legislation will be paused until EU leaders respond to the request to extend the Brexit deadline.  

Boris Johnson the UK Prime Minister said tonight  that the UK government will now take two actions:  it will accelerate contingency preparations for a no-deal Brexit; and he will speak to EU leaders about their intentions.

If EU leaders do not agree to the extension, then the UK will leave the EU on a no-deal basis on 31 October.  This is increasingly unlikely.  The EU President, Donald Tusk, announced this evening that he will recommend that EU leaders agree to the requested extension in the coming days.

What does this mean for business Brexit plans?

Leaving the EU with a deal on 31 October now looks impossible.  

There is a slim chance of a no-deal Brexit on 31 October.  

Businesses should not yet stand down their no deal plans and should base their actions on their own risk guidelines.  No-deal Brexit may be low probability but if it is high impact, as it is for most, then businesses should maintain preparations for 31 October.  Keep monitoring the situation and wait until an extension has been agreed by all sides. 

The most likely outcome now appears to be an extension, delaying the Brexit deadline again. A deal also now looks possible if this delay is granted.  

The end of the beginning of Brexit may be almost in sight. But there remains considerable uncertainty:

  • What type of extension may be agreed in the next few days?
  • What amendments might be added by MPs over the coming weeks and how might the UK government and MPs respond to these?  Extensive debate of the Bill could yet scupper it.
  • Will Government move again to try to hold an election before Christmas or will we have a spring election?
  • In the longer term, what type of Brexit does a deal lead to? Increasingly a ‘soft’ Brexit looks less likely. 

In the midst of this continuing Brexit limbo, we have found that businesses can take many actions to:

  • respond to existing uncertainty in markets and strengthen agility for any eventuality and
  • put in the place the processes and business models needed for any type of Brexit in the future.

Unlike Brexit politics, there is no need to dither and delay.

For further support and information on how we can help: