22 Mar

ABCC Brexit Update - 22 March - EU Agrees to Brexit Delay

  • After failing to pass her Brexit withdrawal deal through the House of Commons in two ‘meaningful votes’ in January and March, PM May wrote to European Council President Donald Tusk on 20 March to formally request a delay to Brexit beyond 29 March to 30 June.  May then travelled to Brussels for a scheduled meeting of EU leaders where she made her case for an extension.
     
  • With PM May no longer in the room, EU leaders spent nearly seven hours debating whether to extend Article 50 (the EU’s secession clause).  Unanimous agreement from all EU Member States is required to delay Brexit.
     
  • EU leaders ultimately agreed to offer the UK an extension from 29 March until 22 May to enable PM May to pass her Withdrawal Deal through Parliament.  The deadline of 22 May would allow sufficient time for a third ‘meaningful vote’ next week, followed by enough time to pass the necessary legislation through the UK Parliament for an orderly withdrawal from the bloc.  A transition period until December 2020 would then begin during which the UK and EU would negotiate a future trading relationship.
     
  • The new Brexit date of 22 May is significant as it is one day before the planned European Parliament elections on 23-26 May.  If the UK were still a member of the bloc, it would be legally obliged to field candidates for the election – something problematic for both the UK and EU.
     
  • At the summit, EU leaders also pledged to ratify agreements made in Strasbourg on 11 March by the UK and EU to provide assurances on the functioning of the Northern Irish Backstop – the most contentious issue within May’s Brexit Deal.  The backstop requires the UK to stay aligned to the EU’s Customs Union until a solution is found to prevent a hard border on the island of Ireland – something unacceptable to the Northern Irish Democratic Unionist Party (DUP) and members of the influential Conservative Brexiteer grouping, the European Research Group (ERG).
     
  • If the House of Commons fails to approve PM May’s Withdrawal Deal in a third ‘meaningful vote’ next week, the EU will then only offer a shorter delay to Brexit until 12 April.  The UK would then be required to “indicate a way forward” on its Brexit plans.
     
  • The UK would face a choice between:
    • a ‘No Deal’ Brexit on 12 April;
    • a longer extension including an obligation to hold European Parliament elections in May; or
    • Revoke Article 50 and cancel Brexit.
       
  • In a statement after meeting with EU leaders, PM May said there was now a “clear choice” facing the British Parliament.  May rowed back from her 20 March comments when she criticised parliamentarians over Brexit.  May said she had “expressed frustration” in her speech, adding that “I know that MPs are frustrated too” and she was “very grateful” to those MPs supporting her deal.
     
  • May also confirmed she would bring her deal back to the House of Commons for a third ‘meaningful vote’ early next week.  May must also take into account the Speaker of the House’s ruling that the vote must not be on “substantially the same” motion MPs have already rejected. 
     
  • May also dismissed calls to cancel Brexit by revoking Article 50.  Over two million people have signed an online UK Parliament petition to cancel Brexit.
     
  • In order to pass her Brexit deal next week, May must still secure the backing of the DUP and ERG.  This would be contingent on the Attorney General updating or changing his legal opinion on the ability of the UK to leave the Northern Irish Backstop. 
     
  • Early next week, Labour MPs Peter Kyle and Phil Wilson also plan to table an amendment to invite MPs to back May’s deal in return for the Government holding a referendum soon afterwards to gain the public’s approval.
     
  • There is growing pressure on May’s leadership, with Conservative Brexiteers calling for May’s resignation in exchange for their backing of her Brexit deal.
     
  • Following last night’s developments, the UK will no longer leave the EU on 29 March.

 

The ABCC and Brexit

The ABCC will continue to follow these developments closely in the coming weeks.  We look forward to keeping members up to date with the very latest from London and what it possibly means for the Australian-British business community.   Earlier ABCC Brexit updates can be found on the ABCC Blog.

If you would like to receive more frequent Brexit updates or have any questions, please feel free to contact our office on abcc@britishchamber.com.

By Paul O’Hagan

Paul O’Hagan is the ABCC’s General Manager in Victoria, South Australia and Western Australia.  Prior to joining the ABCC, Paul was Senior Political and Economic Advisor to the U.S. Government in London, covering Brexit.

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