Newsflash: Risk of "No Deal" Brexit Remains as Brinksmanship Intensifies

January 30, 2019

In a series of votes on 29 January, the UK parliament rejected proposals aimed at preventing the UK leaving the EU on 29 March without a Withdrawal Agreement in place. Although there was a narrow majority for a non-binding call to avoid a “No Deal” Brexit, the UK government has confirmed its position that the UK will exit the EU on 29 March regardless of whether or not there is a deal in place.

However, there was parliamentary support for an instruction to the government to re-open negotiations with the EU to replace the Irish backstop with “alternative arrangements.” The Irish backstop would prevent the return of a hard border between the Republic of Ireland and Northern Ireland – the UK’s only land border with the EU – by maintaining regulatory alignment between them until both the UK and the EU agree otherwise. This is opposed by some Members of Parliament who fear it could lock the UK into close ties with the EU indefinitely.

The Prime Minister has welcomed this mandate and undertaken to secure a revision of the Withdrawal Agreement. But the EU has repeatedly stated that, while it is prepared to consider “clarifications,” it will not re-open negotiations on the text of the Agreement itself.

The Prime Minister will report back to the UK House of Commons on 13 February, followed by another round of voting on 14 February on the way ahead.

With less than two months to go, the prospect is for intensified, high-stakes brinksmanship between the UK and EU in which all outcomes remain possible. While few actively support the UK leaving the EU with no deal, that remains the default if no one blinks. Businesses are advised to step up their preparations. Our previous briefs offer a checklist of action points and other advice. 

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