Brexit Business Brief | What happens now

Written on 13 Dec 2019

The UK is set to leave the EU on 31 January 2020 

With the Conservative Party now in a substantial majority in the House of Commons, it appears inevitable that the United Kingdom will leave the European Union at the end of January 2020 on the terms of the Withdrawal Agreement agreed on 19 October 2019. 

Here are the steps by which that departure is expected to happen.

Step One: get the WAB into the UK statute book

Mr Johnson has indicated that the Withdrawal Agreement Bill (WAB) will be brought to the House of Commons for consideration (its second reading) before Christmas. The WAB is the legislation which implements the Withdrawal Agreement into UK national law. It must become law, i.e. be an Act of Parliament, before the UK’s exit.

The WAB is a technically complex piece of legislation. It would benefit from careful Parliamentary study. There is some time, a few weeks, for that. But the Conservative majority means that the WAB should easily pass the Commons.

The House of Lords will no doubt seek to examine the WAB closely. It will fulfil its constitutional role of scrutinising legislation, but may not – except where the WAB’s drafting can be improved apolitically – be able substantively to amend the WAB.

Expect the WAB to be law by mid to late January.

Step Two: the European Parliament consents to the Withdrawal Agreement

This is required by Article 50 and will happen in January. The Parliament has been intimately involved in the Brexit negotiations and there is little chance that the European Commission and Council would have signed off on the Withdrawal Agreement without being confident that it would be consented to by the Parliament.

Expect this in late January; the Parliament may wait until it is certain that the WAB is law in the UK.

Step Three: the UK and the EU ratify the Withdrawal Agreement

The WAB needs to be law in the UK and the European Parliament needs to have consented to the WAB before the Withdrawal Agreement can be ratified. (Constitutional point: the WAB explicitly disapplies Section 20 of the Constitutional Reform and Governance Act 2010, which otherwise would require the Withdrawal Agreement to be laid before Parliament before ratification.)

Expect ratification of the Withdrawal Agreement at the very end of January, possibly with solemn theatre on 31 January.

Step Four: exit

After 46 years and one month of membership, the UK ceases to be a Member State of the European Union at 11.00 p.m. London time on 31 January 2020.

The transition period 

Immediately upon exit, the UK enters the ‘status quo’ transition period. (This is also called the ‘implementation period’ by the UK government.) 

Why is it described as a ‘status quo’ transition period? Because EU law continues to apply in the UK in – for all practical purposes – the same way it did before the UK’s departure. 

The UK remains within the Single Market, the Customs Union and – again, for all practical purposes – a party to international agreements entered into by the EU. 

The length of the transition period 

The transition period lasts until 31 December 2020. During those 11 months, the UK and the EU are to negotiate the terms of their future relationship. Those negotiations will cover not just economic and business issues, i.e. a trade agreement, but also security, defence, judicial and other matters. 

The terms of the transition period are set out in Part Four of the Withdrawal Agreement. Article 132 allows the period to be extended, by a single decision taken jointly by the UK and the EU, to the end of either 2021 or 2022. That extension decision must be taken before 1 July 2020. 

Unless Article 132 is subsequently amended, there is plainly a risk – if the transition period is not extended and the UK and the EU have not agreed the terms of their future relationship by the end of 2020 – that the UK could exit the transition period on ‘no deal’ terms on 31 December 2020. 

Mr Johnson pledged during the election campaign that he would not extend the transition period beyond the end of 2020. The scale of his victory may give him room to resile from that promise; or he may take the view that it strengthens his hand in insisting that the transition period should last no more than 11 months.

But we run ahead of ourselves. For now, attention will turn to the passage of the WAB through the UK Parliament and to the UK’s legal exit from the EU.