With the Brexit deal defeated in Parliament earlier this week, and the Government narrowly surviving a vote of no confidence, the UK is possibly in the greatest position of political uncertainty since 2016.
In the immediate term, the Prime Minster is seeking to reach across the House and gain some consensus as to what an acceptable deal might look like and is expected to table an alternative motion to the House on Monday 21st January. As yet it is not clear what that motion may comprise.
The range of options as to what will happen next has increased, and so has the uncertainty. The options are broadly:
- A second vote on the same deal
- Further negotiations with the EU
- A second vote on a revised deal
- Greater influence from Parliament
- General Election
- Deferral of Article 50
- Second referendum
- No Deal
- Revoking Article 50
Whilst there have been various moves in Parliament to prevent a no deal outcome, given the unchartered political territory we are now in, it is still the current default position unless a workable alternative is found. Our advice to business is therefore to continue to plan for no deal – ensuring readiness for most of the scenarios that could conceivably play out.
Even if a deal is reached, and business has the short term relief of the transition period, there remains a substantial amount of work to be done to agree the terms of the future relationship between the UK and the EU. For many, in particular in the service sector, material changes to trading conditions may still await in 2021. Agreeing the terms of the exit would only signal the end of the negotiation of the UK withdrawal so the longer-term imperative remains for business to plan for a range of outcomes.