In a referendum on 23 June 2016, 51.9% of the participating UK electorate voted to leave the EU, out of a turnout of 72.2%. On 29 March 2017, the UK government invoked Article 50 of the Treaty on the European Union. The UK is thus due to leave the EU at midnight on 29 March 2019 Central European Time (11 pm on 29 March 2019 GMT)
The transitional period will last from Brexit day on 29 March 2019 to 31 December 2020 under the following terms:
- EU citizens arriving in the UK between these two dates will enjoy the same rights and guarantees as those who arrive before Brexit. The same will apply to UK citizens on the continent
- The UK will be able to negotiate, sign and ratify its own trade deals during the transition period
- The UK will still be party to existing EU trade deals with other countries
- The UK's share of fishing catch will be guaranteed during transition but the UK will effectively remain part of the Common Fisheries Policy, yet without a direct say in its rules, until the end of 2020
- Northern Ireland will effectively stay in parts of the single market and the customs union in the absence of other solutions to avoid a hard border with the Republic of Ireland
There is a simple rule before embarking on any medium to large project; ensure that you know where you intend to end up prior to committing to a completion date. This is critical to the success of any reasonably complex project and was an absolute must for Brexit, which is one of the most complex projects of modern times. The number of parties with a stake in the outcome ensures that extreme care should have been applied prior to Article 50 being triggered.
For any project to be a success there are things that must be agreed in advance, whether the other parties involved are willing or not. So for example if the party you are negotiating with is unwilling to negotiate a starting point or terms of engagement suitable to your aims, then it is imperative that you clearly document all your aims, timings and ways of working prior to committing to the project. With these tools at your disposal you can, as much as is possible, drive the outcome that best suits you.
Prior to triggering article 50 the following documents should, as a minimum, have been in place and discussed with the European Union:
Statement of Work (SOW)
This is an agreement between two parties that details the activities to take place. In this case it should have been a document created by the UK government and agreed between UK parliament and the European Union prior to article 50 being triggered.
Regardless of views on whether there is any purpose to Brexit, it does not take away from the fact that a purpose should be understood and agreed prior to setting out to deliver. This needs to be detailed to such an extent that both parties can understand the expectations of the UK Parliament. The key message in this section of the SOW is 'why is this work going ahead?' Government serves us (or should) and as stakeholders we should be privy to this information. “Brexit means Brexit” does not meet the requirements of this section.
Scope of Work
In the case of Brexit this required a high level of detail prior to article 50 being triggered due to the level of complexity and in particular because this process was not two parties necessarily agreeing an amicable outcome. It does not serve the EU well to give the UK all that it wants, so it was imperative to gain formal agreement at the start about what both parties would agree to during negotiation. Both parties (UK & EU) have much to lose if the process fails to be carried out successfully. This section should have included every agency impacted and the description of those impacts.
This section was one of the most important to go out for consultation with all impacted agencies, whether that be Gibraltar, Northern Ireland or such agencies / agreements such as the European Arrest Warrant or Fisheries Policy. This was key to understanding the level of work required and so ensure that reasonable timescales were planned for.
Location of Work
Where people will meet to do the work. Not only negotiators, but the UK team. This focuses the mind on the complexity of putting a working team in place.
On a project of this nature, where once article 50 was triggered there is a final date that must be met, it is imperative not to start until it is clear that deliverables can be met. An example of the government's ineptitude in this area is that having triggered article 50, they then introduced the idea of an Implementation Period (based on the Labour policy of a Transition Period). Having not agreed an implementation period in a SOW has means that the government is reliant on the EU agreeing to it at the 11th hour. This has handed the whip hand to the EU. If the SOW work had been carried out in advance, the government could have set a realistic date for triggering article 50 and faced down EU protestations at the delay.
This section should have included a high level project plan, with:
- What is due and when
- Main tasks and their start and end date
- Overlapping tasks
- Who is responsible for delivery
Normally a SOW would only need a high level plan in the early stages, but due to the difficulties that Brexit presents and due to the drop dead date written into article 50, the SOW should have included a very detailed delivery plan. This would have been a separate document, but would have formed part of the SOW sign off.
This section should also include the following table:
- Who is accountable for delivery
- Who is a consult on delivery (UK Parliament, Business, Unions, Public Service Organisations & EU Parliament for example)
- Who should be informed (UK & EU public)
In addition to the above documents, there should have been a communication plan. This would detail the methods of communicating, who will be communicated with and what level of detail will be provided. This would also detail what the intended result (deliverable) of that communication should be.
Many demands raised by the UK government have fallen foul of the EU legal framework. In short, the demand cannot be met as it contravenes EU law. This should have been covered in an SOW and where EU law needed to be changed to meet the demand, a likelihood of success and timescale should have been detailed.
Also, this section should have included a clear procedure for dispute handling during the negotiation process. This would have avoided the shotgun style media show boating that has been a feature of this negotiation. When a group of politicians expressed their view on a particular aspect of the targeted outcome, it would be irrelevant to the overall agreed process.
Further to the above, and of far more importance, are the issues around the legality of triggering article 50. Nearly 18 months into the process there is still a case pending on whether the whole process is legal.
This should have detailed the exact process of sign off for all the activity and any testing that would be required in advance of the UK leaving the EU. It seems not to have occurred to either party in these negotiations that testing the outcome of a given decision should be considered in advance.
Being as the government was insistent that there would be no exit bill to be paid and then had to face the reality that they are legally bound to meet previous commitments, it was important to have agreed these prior to triggering article 50. Even to this day it is not being made clear to the public what we will eventually end up paying and we are open to the EU adding new demands at the last minute.
Is a no deal better than a bad deal?
It has often been said by Theresa May that no deal is better than a bad deal. As we stand now we'll be either accepting a bad deal or no deal whatsoever. A good deal is no longer on the table. The government, having spent the greatest part of the negotiation period arguing amongst themselves, are now at a point where they will have to accept the terms laid down by the EU. To negotiate one of the most complex processes in the history of the UK and not have a plan before starting the project is beyond irresponsible. It borders on the insane. Whether you are a remainer or a leaver there is no way that the handling of the process can please you. As laid out in the section Triggering Article 50 the starting point for even a medium sized project should be created in minute detail. If planning a medium sized project where the delivery time was, like Brexit, two years, you could not begin the project until the final deliverable had been agreed. Even then, many well planned projects fail due to external circumstances or simply because the delivery team lack capability. The timescale for delivering Brexit of 2 years was always ambitous (hence the transition period) and it was imperative that prior to submitting article 50 that we had all deliverables understood and lined up, with as much prior preparation carried out as possible as well as a plan for every minute detail of the 2 year leaving period once A50 had been submitted.
This section looks at what is on the table at the moment. As we stand we only have no-deal or bad deal left on the table This section outlines what the remaining two outcomes mean for the UK, as well as giving further insight into what it means when the government talks about "WTO Terms". Elsewhere we detail what a good Brexit could look like, although obviously many would argue that there is such thing as a good brexit
|No deal||Crashing out of the EU at 11pm on the 29th March 2019 with no|
deal and no transition period. This would mean reverting to WTO terms for trade
|WTO terms||What is meant by WTO terms|
|Bad deal||Compromise deal where we agree enough to take us into a transition|
period with terms that will cause further divide in the UK. The Chequers deal
should be seen as a bad deal. The reasons why are discussed further on in this section
|Good deal||What is the best deal the UK could have hoped for had it planned|
The sections have been prepared with the use of the videos "3 Blokes in the Pub - Talk NO DEAL Brexit" Where the 3 blokes (in the pub) make a statement, it was cross checked with other sources to check accuracy. Their assertions are accurate.
This is crashing out at 11pm 29 March 2019. This is where we will stand at that point:
|Vehicle Insurance (commercial only)||
|Working just across the border||
Cost of transporting goods outside EU
|UN ADR Rules||
|The 70 white papers||
|Owning a company abroad||
Crashing into WTO terms
WTO Tariff Schedule
- The World Trade Organisation (WTO) has 164 member countries
- Tariff schedule agreed between all members lays out what the tariffs will be for all goods traded between members of WTO
- The tariff schedule has 4500 product groups
- Within each product group their are many products. For example in the steel product grouping there are 3200 different types of steel plate
- Each product within the product groups has its own schedule of tariffs to be charged under WTO terms
- The UK as part of the EU is within the Commons Custom Tariff (CCT)
- The EU looks at all products made within its borders and sets the tariff under CCT to place high tariffs on goods it makes and low tariffs on goods it needs to import into the union
- Items that we cannot make or grow within the UK, but are made or grown in the EU, as part of the EU we have tariff free trading. For example vegetables and fruit that we buy from Spain, which we can't grow in the necessary volumes in the UK.
- The UK will need to go through all 4500 product groups (and products within those groups) and decide what tariffs to charge on what products
- This is a highly complex process because the UK will need to balance off the issue that we need to import some products while we also produce the product domestically. Getting the balance right to ensure the domestic production survives and we can still import the additional product needed to meet our needs will take years of negotiation with supply countries.
- The sheer number of products will mean not only will the negotiation period with other countries take years, creating the schedule will take years also
- We cannot simply copy the CCT into our tariff regime as we no longer are part of the EU and so cannot measure in the tariff free supply we presently benefit from
- This also means we will lose trade agreements with 60 other countries as well as the EU, as our trade is carried out with these countries under EU agreements. With no tariff schedule, no way of measuring or collecting tariffs this will mean that we will not be able to trade with 87 countries that we do 90% for our export business with
- As the UK will have no trade agreements with countries and will have no Common Custom Tariff (CCT) agreement with the WTO we will be termed as having "third country status" with the WTO
- Third country status means that tariffs will be charged at the highest rate until a trade agreement is in place
- UK trade agreements will be put in place during the transition period. No deal means no transition period. Effectively upon leaving the EU, UK goods will cost 20 to 30 percent more to importing countries than they do today
- This would be a no win situation for the UK as we would need to set our tariffs as low as possible to continue receiving goods, but we couldn't apply that to a just the EU. Under EU rules we would have to apply the same level tariff to all WTO member countries
- We are protected from for example the EU using its internal zero tariff regime to damage the UK market by the CCT agreement. This would no longer be the case
- Othe WTO member countries could not offer us zero percentage tariffs as this would mean they would have to offer it to all other WTO member countries, destroying their own internal markets
- Pretty much all major trading partners have refused UK proposals to the WTO on trading quotas
- Refusal of the terms means the UK has to re-work the whole proposal, get agreed by the EU and re-submit it to the WTO. This proposal may still be rejected by some countries meaning that the whole proposal will be refused
- The UK presently exports 417 million GBP of manufactured goods per day. This will instantly stop. Even if these markets can be reopened at some point, the UK will have lost their market to foreign competitors.
- The workforce associated with building 417 million pounds worth of goods per day is very large. These jobs will be lost. Likely many of the workers will emmigrate to work for companies that take up the slack rather than starve
Bad Deal Brexit
There is one thing that the UK and EU agree on and that is "no deal is better than a bad deal." However both parties in the process have completely different reasons for holding this view. In the case of the EU a bad deal (such as chequers) would mean that they would sign up to agreements that broke their own laws and would also put mean that their trading partners could take them to the WTO for breaking the terms of agreements they had made with them. In the case of the Conservative government it is a foolish bloody mindeness that means that they think they should be tough negotiators in order to secure a deal.
Chequers can be defined as a "bad deal" brexit. In reality it can be defined as a no-deal brexit. It cannot legally be passed by the EU and there appears to be little chance of any of it surviving negotiation with the EU. It does beg the question, if those so called members of the government that say they support a soft brexit are sincere, why did they vote for a white paper that is blatantly undeliverable? The only conclusions that can be arrived at is that they are making noise simply so that they can protect their own voter base when the UK crashes out of the EU.
The statement released from the Chequers meeting was heralded as a major breakthrough. The fact that it was released in July 2018, 15 months are article 50 was submitted should have raised major alarm bells. Generally however it was accepted as a step forward. The statement was in short a repeat of earlier demands placed on the EU that had already been rejected out of hand. It may be fair to state that the EU is rejecting these proposals out of hand because it wants to teach the UK a lesson or at least taking some pleasure in the fact that it can't grant UK wishes due to a legal framework. Whether that is the case or not, it is fair to say that the EU holds the whip hand and any proposals that the UK come up with will be rejected unless they meet that legal framework. This proposal did not
The white paper was approved in parliament in July 2018 with an amendment that undermined its credibility even further. The original white paper stated the following in 17b:
- The UK and the EU should agree a mechanism for the remittance of relevant tariff revenue. On the basis that this is likely to be the most robust approach, the UK proposes a tariff revenue formula, taking account of goods destined for the UK entering via the EU and goods destined for the EU entering via the UK. However, the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK. The UK and the EU will need to agree mechanisms, including institutional oversight, for ensuring that this process is resilient and verifiable.
The above paragraph may have been possible to gain agreement on with the EU, however this is not what formed the final approval in parliamment. However the European Research Group was able to add the following amendments to the paper:
- HM Revenue & Customs could not collect duties or VAT on goods on behalf of the European Union unless there was a reciprocal arrangement
- Make it illegal to have a customs border in the Irish sea
- The EU must offer reciprocal tariff collection for the UK
- The UK government would need further legislation to form a customs union with the EU
Amendment 1 ensures that the EU cannot enter into a customs union within the UK and amendment 2 ensures that the backstop for the Irish border cannot happen. As the EU cannot provide amendment 3 as it would be impossible for them to measure such things and would not be interest of member countries to add an extra layer of bureaucracy simply to meet the needs of a UK political decision. Amendment 4 cynically recognises the short timescales and kicks the process far enough down the road to be unachievable.
So this deal is a bad deal for the both the UK and the EU. This ensures that it could only be ratified by the other 27 EU countries if it was changed radically. It is difficult to see a situation where it could be changed radically while meeting the red lines that the Conservative government has put in place. The red line that there will be no Irish border in the Irish sea is written into law. It is also written into UK law that there will be no Northern Ireland / Ireland border.
In summary the EU now agrees fully with the UK government that a bad deal is worse than a no-deal for them.
- Since the referendum inward investment in the UK has fallen by 92%
- This is equivalent to 30 billion GBP per year in lost revenue to HMRC through Income tax, VAT and National Insurance
- Up until Brexit inward investment in the UK had seen a year on year increase
- The government has stated that the fall of inward investment is a good thing because it means less jobs and thus less immigration
- The NHS has 40,000 vancancies for Nurses
- Nurses (and other workers) have stated that they are leaving the country due to the uncertainty about their future right to be in the UK
- If we have a no-deal brexit thousands of nurses (and other workers) will have no right to stay in the UK from 30th March 2019
- Manufacturing companies are already moving their operations to mainleand Europe
- Fruit of the Loom
- Further research required
- Financial services companies are moving abroad
- Note that Jacob Rees Mogg is an example of this cynicism where he is fine with destroying the UK manufacturing and farming industries, while moving his own investments into the EU to ensure they are covered by the EU financial passport
- Also note that the UK did not seek a financial passport vigorously in the Chequers deal as it does not impact the wealthy as they move their trading outside the UK much more easily than farmers or manufacturers. Jacob Rees Mogg then scuppered the Chequers deal which offered the best (if little) hope that industry outside the financial sector could survive in the UK
- The transition period is unlikely to be possible at this stage as it has to be agreed by not just 27 EU members, but also 36 regional parliaments
- The EU cannot put in place ad hoc treaties with the UK, as it has treaties with 60 other countries and these treaties would be broken if it does a special deal with the UK
- The UK has acted throughout this process as if it is negotiating a trade deal. The EU is a legal framework of treaties. It is not about negotiation, it is about the UK putting in place the legal framework to be able to effectively continue interacting with the rest of the world
- It is not true that the EU needs our economy
- Since the UK submitted A50 we have shrunk as an economy
- In the meantime the EU has done a deal with Japan for zero tariffs
- Japan is a bigger economy than the UK
- The EU has already replaced the trade it will lose by the UK leaving
- It has also done a deal with Canada
- The UK has never had a problem with availability of trade deals with good tariffs. The problem has always been that we then haven't taken advantage of those deals
- We'll have no trade deals when we leave the EU. Any energy that should be spent trading will be spent on trying to put a trade deal
- Terms of Implementation Period (Transitional Phase) https://www.bbc.com/news/uk-politics-43456502
- European Parliament: Brexit and the European Union: General Institutional and Legal Considerations http://www.europarl.europa.eu/RegData/etudes/STUD/2017/571404/IPOL_STU(2017)571404_EN.pdf
- Leaving the EU: Payments to be made to meet agreed commitments https://www.politico.eu/article/britains-brexit-bill-revealed-37-1-billion-over-45-years/
- 3 Blokes in the Pub - Talk NO DEAL Brexit https://www.youtube.com/watch?v=Sx4AF-3Rd44&t=1164s
- 3 Blokes In The Pub... Talk THE BEST Brexit https://www.youtube.com/watch?v=sju9laLqeCo
- 3 Blokes In The Pub... Talk PROJECT FEAR https://www.youtube.com/watch?v=LH6O32Dqix0
- 3 Blokes In The Pub... Talk NO DEAL NOTICES https://www.youtube.com/watch?v=ohMnvXGjJWE
- No-deal Brexit poses serious risk to public safety, say police leaders - Guardian 6th August 2018 https://www.theguardian.com/politics/2018/aug/06/police-leaders-warn-home-secretary-public-safety-threat-from-no-deal-brexit
- Members of the World Trade Organisation https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm
- WTO Details of Tariffs https://www.wto.org/english/tratop_e/tariffs_e/tariff_data_e.htm
- EU Common Custom Tariff (CCT) https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/what-is-common-customs-tariff_en