As the political negotiations between the UK and EU unfold, Kennedys is here to keep you up to date on the latest Brexit developments and what they mean for you and your business.
29 January 2019
Brexit amendments take shape
With the Prime Minister having delivered the opening speech in the debate on the Government’s proposed ‘next steps’ on Brexit, the extent of the moving parts still involved remains clear. Nevertheless, of the selected amendments, Graham Brady’s is now the frontrunner and the most crucial for the Government.
The amendment itself contains little detail, simply calling for a renegotiation of the backstop and “alternative arrangements” to be put in place. However the new Conservative plan that became public overnight (dubbed the ‘Malthouse plan’) was acknowledged by the Prime Minister as one of the potential options. Under the Malthouse proposals, Theresa May would seek to renegotiate the Irish backstop, whilst also extending transition to December 2021 to allow more time to agree a new trading relationship. If the attempt to renegotiate the backstop fails, the proposal also includes a ‘Plan B’ - for the Prime Minister to ask the EU to honour the agreed Brexit transition in exchange for which the UK would honour its agreed financial contributions and its commitments on EU citizens’ rights. The theory is that this would give both sides time to prepare for a departure on WTO terms at the end of 2021 - effectively a ‘managed no deal’ scenario.
For now, we await where expressed support actually rests at the crucial time. Voting is expected to begin tonight at around 7pm and as we have seen, the direction of travel can change quickly.
18 January 2019
As a somewhat extraordinary week in Westminster draws to a close, we can anticipate more of the same next week as Prime Minister Theresa May continues her cross-party talks to find a way through the impasse on Brexit in Parliament.
While MPs roundly rejected the deal, the vote provided no clarity on what Parliament would support. Therefore, Theresa May's objective is to now understand what the Commons supports, in contrast to what it opposes. Permanent membership of a customs union in the future relationship is thought to be one area of compromise that could win Labour votes. For now, though, Downing street is insisting that it would not support customs union membership.
The process of finding out whether a Plan B can be found begins on Monday (21 January) when the Government is expected to make a statement and table a motion on its next steps under the Withdrawal Act. A full day’s debate on the motion will take place on 29 January (subject to agreement of the House) and the votes will once again be politically significant. However the markets may be interpreting moves so far, the reality (for now) is that the default legal position remains no-deal exit on 29 March. Whether the chances around such an event increase or decrease (along with the possibilities of a general election and an extension of Article 50) waits to be seen.
If the last week has shown us anything, it has confirmed just how quickly the political narrative can change.
15 January 2019
Article 50 extension: an increasing prospect
After a General Affairs Council meeting last week in Brussels, some EU diplomats reportedly said that an extension of the Brexit negotiating period beyond 29 March is increasingly looking inevitable.
According to POLITICO EU, EU officials claimed that the UK government in denial on the prospects for a No Deal and that the UK has not still approached Brussels on the possibility of extending the negotiations.
Ireland’s Foreign Affairs Minister Simon Coveney said last Tuesday that his country is ready to support the extension of the negotiations if it was requested by the UK.
14 January 2019
The meaningful vote is due to take place tomorrow
After months of prevarication, MPs will be given the opportunity to vote on the terms of both the Withdrawal Agreement and the Political Declaration on the future UK-EU relationship, in what will be a defining moment for the Prime Minister, the Government and the outcome of Brexit.
Parliamentary arithmetic still looks bleak for the Government, with few MPs having changed their position since the deal was first tabled for debate in December. The ardent opposition from Eurosceptic members of the European Research Group, staunch pro-EU backbenchers and the DUP all lead to very bleak prospects for the passage of the current deal.
Following the Government's likely defeat this week, it remains unclear as to what their proposed course of action will be - with speculation that Ministers may seek to re-table the deal for a second vote, or seek an alternative course of action (such as membership of the EEA).
From the perspective of the Opposition, Labour has made it clear that the Party's priority is to force a General Election if the Government's deal is voted down, with Leader Jeremy Corbyn vaguely committing to "keep all options on the table" if this cannot be achieved - in order to avoid officially supporting calls for a second referendum.
7 January 2019
Recap: the position at the end of 2018
Government stepped up no deal preparations: The Cabinet met the week of 17 December and agreed to increase preparations for a no deal Brexit. This was followed by numerous reports in the media that emphasised the drastic measures expected, including keeping 3,500 troops on “standby”. Various members of cabinet made clear their opposition to allowing a no deal Brexit. Some stated they would quit the Conservative Party if it “were to announce that 'no-deal' Brexit had become its policy”.
Theresa May seeks assurances on backstop: The Prime Minister is hoping to secure legal assurances on the backstop agreed as part of the Withdrawal Agreement in her Brexit deal, in order to gain support for the deal from the DUP and Brexiteers within the Conservative Party. The deal will be voted on Tuesday 15 January (after a period of debate).
Bank of England responded to no deal contingency plans: The European Commission announced its latest contingency plans for a no deal Brexit, including Delegated Regulations aimed at addressing the issue of contract continuity of derivative contracts. HM Treasury and the Bank of England have already put in place a temporary recognition regime for non-UK CCPs and a transitional regime for non-UK CSDs. These will enable EU CCPs and CSDs to continue to provide services in the UK in a no-deal Brexit scenario.
13 December 2018
Brexit optimism on hold
Theresa May’s optimism at reaching a deal on Brexit proved short-lived. Since the Prime Minister took her deal to Parliament at the end of November, she has been faced with overwhelming opposition on all sides.
May’s Government lost three significant votes in the Commons, her anticipated TV debate was cancelled; she endured the reaction of postponing her meaningful Parliamentary vote on the Brexit Withdrawal Agreement, and has been told by Brussels that she must clarify what she wants out of talks. Having survived a vote of no confidence, she is though still standing.
Read more here
30 November 2018
The reality of sealing the deal
Brexit has taken one step closer to being concluded, but there remain significant hurdles ahead. Last weekend, the European Council officially concluded Article 50 negotiations with an endorsement of the Withdrawal Agreement and Political Declaration at an extraordinary Council meeting in Brussels. As expected, the meeting was largely a procedural affair, despite some last-minute posturing over lingering issues like fishing rights and Gibraltar.
The political battle now begins at home for the Prime Minister
The Cabinet, with Theresa May at the very forefront, have admitted the vote on the deal would be “challenging” but it now must make it clear to colleagues and to the country that “the choice is between this deal or the uncertainty that would flow if this deal does not go through”.
Read more here
12 November 2018
Threats to exporters if no Brexit agreement is reached
Brexit provides economic threats to exporters, with such things as higher tariffs, and stricter border checks and packaging regulations. In addition, are a number of uncertainties to the legal framework, such as what a no-deal Brexit (no-deal) would mean for key contractual terms in cross-border disputes, when the current laws that underpin their validity are predominantly EU law?
19 September 2018
Mapping the Brexit storm - supply chain concerns post-Brexit
In September 2018, at the Zero Emission Vehicle Summit in Birmingham, the Chief Executive of Jaguar Land Rover (JLR), Ralph Speth, raised fresh concerns around the continued operation of UK manufacturing plants after Brexit. In front of both the Prime Minister and members of the cabinet, Speth warned of the ‘tens of thousands’ of jobs at risk and the uncertainty of UK plants remaining in operation in the event the UK fails to reach an agreement with Brussels.
Read more here
30 August 2018
Brexit White Paper: protecting the UK life sciences industry
The UK government published its White Paper on 12 July 2018, setting out a future trading relationship with the EU, laying the foundation for the future.
The government’s vision with regard to the life sciences industry offers some much needed reassurance to the sector. Indeed, the proposals appear to respond to the recommendations made to government by the House of Commons select committee on how to safeguard the industry from the impact of Brexit.
9 August 2018
Giving insurance a voice: Brexit ‘nightmare’ for industry unless government breaks political deadlock
We are delighted to introduce our latest report - Brexit and the insurance sector: Towards 2020 and beyond - as part of Kennedys’ ongoing commitment to providing key business insights on Brexit and how it is likely to impact on the UK’s insurance sector.
Read more here
30 January 2018
EU motor law: the impact of Brexit for the UK
Britain’s motor industry is a ‘star performer’ of the UK economy. Its reported turnover was a record £71.6 billion in 2015. Accepting the benefit that membership of the European Union (EU) has allowed, the industry is understandably nervous about the potential effects of the UK leaving the EU, including big-ticket issues such as exports and attracting and retaining EU talent.
Against the background of uncertainty over future trading relations with the remaining Member States - that may hit inward investment in the motor industry in the UK - we reflect on the key challenges and issues that lie ahead.
4 May 2017
Belgium bound? What does Lloyd’s proposed subsidiary in Brussels mean for London?
The day after Prime Minister Theresa May triggered Article 50 to begin the Brexit process, Lloyd’s of London confirmed its plans to open a new European insurance subsidiary in Brussels.
Whilst Lloyd’s already has a number of offices in the EU and the European Economic Area (EEA) states, and indeed globally, the move to open a subsidiary in Brussels may indicate a shift of focus from the UK following Brexit.
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7 October 2016
EU air law: the impact of Brexit for the UK
The single air transport market is seen as one of the greatest achievements of the European Union. It has reduced fares for consumers and increased passenger numbers, whilst ensuring passenger safety, security and consumer protection. It has also created an EU vehicle through which current and future air transport relationships with non-EU countries are defined.
We review the challenges ahead, in particular those relating to market access, and consider potential alternatives to the current EU single air transport market.
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26 September 2016
Brexit and securing the passport
For insurers operating in London or the UK, as part of a wider European business strategy, the passporting implications of Brexit are significant.
Insurers need to understand what the implications are for their business either losing or maintaining passporting rights from the UK into the EEA (and vice versa). They need to consider how they can best structure their businesses to preserve passporting rights within the EEA, if that is important to them. Finally, they need to consider whether they can afford to wait before acting, given the uncertainties surrounding what the UK’s eventual access to the single market will be and how long that will take to be established.
Read more here
27 May 2016