Published Thursday 2nd January 2020
December 2019’s general election result will make a sizeable impact on the way the United Kingdom is run over the next few years. Such an emphatic result gives an unexpected level of power to the Conservative government and its leader Boris Johnson, which could lead to notable shifts across all policy areas.
While much of this government’s long-term direction is yet to be discovered, one thing we know with a degree of certainty is its approach to Brexit. Notably outspoken throughout the process, Johnson’s party now has full control over proceedings as we enter the next vital phase of negotiations.
Where are We With Brexit?
The latest development regarding Brexit took place on Friday 20th December, just one week after the General Election. With a new government formed, the much-debated Withdrawal Agreement was successfully supported with a majority of 124 MPs. This action effectively ratifies the Withdrawal Agreement, meaning that the UK will formally leave the European Union on 31st January.
Thankfully for businesses, it also means that the UK will leave the EU with a Withdrawal Agreement in place, as opposed to the much-criticised no-deal scenario that many feared. This transition period means that as we enter the next stage of negotiations, businesses can import and export in the same manner as they do currently.
What Happens in 2020?
As mentioned above, once the UK formally leaves the European Union at the end of January, the second phase of negotiations will begin. This phase will go into detail concerning the future trading agreement between the UK and the EU. There is also the potential for the UK to agree on further trade agreements with other countries, like the USA, during this period.
There are many concerns, however, regarding the length of the transition period during which the future UK-EU arrangement must be finalised. Currently, the transition period will conclude on 31st December 2020, giving just 11 months for an agreement to be detailed, agreed and ratified by both parties. There are particular concerns regarding the bureaucratic processes required by the European Union before and after negotiations. All member states will have to agree on a negotiating position, with some experts believing this could postpone talks until March. Furthermore, the final agreement will also have to be approved by all member states.
Will Boris Johnson Deliver Brexit?
The complex nature of these upcoming negotiations has led many to believe that finalising an agreement by the end of 2020 is unrealistic. However, Boris Johnson has made it clear that he wants the process complete by the original deadline. The Withdrawal Bill supported on 20th December, assuming it goes into law, effectively bans any extension beyond the December 2020 deadline. The Prime Minister argues that this will focus minds into getting a deal agreed and stop the process continuing over the next few years as the previous negotiations have done. However, critics claim that these unrealistic ambitions make a no-deal Brexit more likely.
Next year could be comparatively simple regarding Brexit, at least for the first half of the year. These upcoming negotiations will primarily take place behind closed doors, as ministers seek to agree of the relationship going forward. Later in the year, given the unlikelihood of any further delay, we can expect to see some form of ratified agreement. It is not clear how much power MPs will have to debate these finalised documents, given the options between a deal or no deal, while the same can be said for the European Union’s members. It is also unclear how much detail the agreement will contain – some analysts believe it may only be a framework of critical points, allowing for further negotiations in certain areas beyond the December 2020 deadline.
Regardless of the upcoming negotiations, it is becoming increasingly apparent that the UK will not only leave the EU but will be operating to a different trading arrangement with its closest neighbour by the end of the year. With this in mind, it is increasingly vital that companies reevaluate their current Brexit contingency plans to ensure they’re up-to-date, given the latest developments and changing expectations.
Here at Expense Reduction Analysts, we’ve been helping major UK businesses streamline their supply chains throughout the Brexit process. With further changes on the horizon, now is the right time for companies to undergo a thorough evaluation of their existing procurement strategies, to ensure the strongest possible foundation ahead of Britain’s exit from the European Union. If you’re interested in discovering what we could do to support your business throughout this time, why not get in contact with our experienced cost reduction consultants today?