With a new Prime Minister and Cabinet now in place, there’s a new narrative sweeping Westminster. But what exactly does ‘No-Deal Brexit’ mean, and what should you be doing to prepare? PPA’s Public Affairs team discuss the potential outcomes
The default legal position is that the UK leaves the EU on 31 October 2019, with or without a deal. This is written in primary legislation and can only be changed by an Act of Parliament amending the date in law, or if the Government puts forward a measure called a Statutory Instrument to change the date.
Boris Johnson has staked his premiership on the UK leaving the EU by October 31, and with the Government in control of the parliamentary timetable (at least that’s how things are supposed to work), legislation to change the date in law is highly unlikely.
The new Prime Minister has said that his Government intends to seek a deal with the EU, but any new Withdrawal Deal cannot include the so called Northern Irish backstop (a measure that keeps the UK in a customs union with the EU after Brexit, until a solution is found to manage trade and movement across the Irish border), something the EU has said must be included in any deal and is non-negotiable.
Without significant change in political positioning from the UK or EU, a no-deal exit on October 31 2019 looks increasingly likely.
So, how prepared are we?
Theresa May’s Government passed the majority of its planned legislation to help mitigate the impact of no-deal (Customs Act, Nuclear Safeguards Act, Healthcare (EEA and Switzerland Arrangements) Act, Road Haulage Act and the Sanctions Act). However, some important gaps remain with key legislation on Financial Services, Fisheries, Immigration Agriculture and Trade all stalled and on the parliamentary backburner.
However, these are now considered ‘non-essential’ bills and the Government believes it can manage with a number of work-arounds to allow them to act without the need for primary legislation, as it fears new legation brought before parliament would be amended by MPs in an attempt to block a no-deal departure.
Equally, through the EU Withdrawal Act 2018 - and swathes of secondary legislation passed by Parliament since the 2016 referendum - the acquis of EU law (accumulation of EU legislation of 40+ years) has been transposed into domestic legislation. In effect, this means the UK’s legal framework remains aligned with the EU from day one of no-deal. However, with every new rule passed in the UK or Brussels, we will begin to diverge.
Connectivity to EU markets
We’ve heard a lot in the press about various ‘side deals’ that will keep planes flying and ensure the cliff-edge of a no-deal exit is smoother than it otherwise might have been. But what do these ‘side deals’ actually mean?
It’s true the EU has also passed laws granting certain continuity rights for UK business, but these are unilateral measures which run to a fixed future date. Importantly for UK trade connectivity, UK airlines’ rights to fly to the EU end on 31 March 2020, and UK hauliers’ rights to transport people and goods to the EU end on 31 December 2019. Extension of these rights requires EU legislation, which may not be possible until the new Commission is in place in November.
While many expect any no-deal scenario to be short-lived, with the UK and EU quickly reaching subsequent agreements, it is worth noting that under EU law, securing a deal outside of the Article 50 process is more complex. If the UK leave with no-deal on October 31, the EU Council’s legal authority under Article 50 expires and any new deal would have to be negotiated as a ‘third country’ agreement under Article 218 of the Lisbon Treaty. This requires unanimity for any wide-ranging trade deal as well as approval by all EU 27 national parliaments. Equally, existing EU trade deals – to which the UK is currently a party - would end on 1 November, unless those countries agree to roll them over. The Department for International Trade reports the UK has signed continuity trade agreements with non-EU countries accounting for 64% of trade currently covered by EU agreements for which the UK is seeking continuity. The House of Commons Library paper reports on the deals which have yet to be rolled-over (as at July 19), including Japan, Canada, Turkey.
What Should You Do To Prepare For Brexit
Many of the challenges (or opportunities) of a no-deal Brexit are not unique to publishing. But with the UK and EU ramping up no deal planning, there are steps you may wish to take to prepare your business.
Our recent PPA member survey showed just 23% of respondents have made any investment in Brexit planning (deal or no-deal). Nearly a third had made some contingency plans for a no-deal scenario ahead of the original March 29 departure date, including activities such as setting up EU subsidiaries, increasing paper stocks, holding higher cash reserves, and relocating print/production to the UK.
The Government is planning a £100m new public information campaign to provide business and individuals with more information about preparing for a no-deal exit, likely to direct people towards the dedicated government microsite https://euexit.campaign.gov.uk/
“Delivering a deal negotiated with the EU remains the government’s top priority. With an implementation period until December 2020, this would give businesses and organisations stability, certainty and time to prepare for our new relationship after Brexit.
“However, the government must plan for every possible outcome including no deal. Without a deal, businesses and organisations may need to take action before 31 October 2019.”
The site is a signpost to a suite of documents, and hosts a checklist tool as well as guidance on a range of issues including employing EU citizens, importing and exporting, using personal data, intellectual property and more.
You can find a full suite of government guidance documents here: https://www.gov.uk/government/brexit#guidance_and_regulation
This remains the most comprehensive resource for Brexit planning, deal or no-deal.
The PPA is working with partners across the Creative Industries on a number of Brexit projects, as well as speaking to government agencies and ministers to share you views and priorities as we get closer to October 31. If you have questions or experiences relating to Brexit that you’d like us to share, please get in touch.
While we are unable to provide specific legal guidance, we are planning an open forum for members in September to discuss some of the key questions around no-deal planning, bringing together experts from across the PPA’s associate members network to provide you with authoritative advice. If you would be interested in attending such a forum, or have specific questions or issues you would like to raise, please contact PPA Public Affairs Executive, Amy Owens on email@example.com