The rough road to Brexit

Today’s High Court’s decision is just the latest twist in what is inevitably going to be a long and fraught journey towards Brexit.

In the Court’s judgement, it conclusively stated that the government does not have the power to trigger Article 50, the mechanism to leave the EU, without parliamentary approval. Number 10’s Plan B is to appeal this decision at the Supreme Court – with a hearing pencilled in for 7 & 8 December and a likely verdict in January. But the Prime Minister will undoubtedly also need a Plan C to ensure that a parliamentary vote – if required – upholds the referendum result.

A parliamentary vote can’t be taken for granted. Certain commitments about the UK’s negotiating position or further parliamentary involvement would almost certainly be sought by MPs or Lords. A standoff in parliament over the terms of negotiation could lead to delays, whereas a vote against Brexit would likely trigger a general election to confirm the public’s wishes (Plan D?). The Prime Minister has made much of ‘getting on with the job’, but the Supreme Court could yet place a major parliamentary hurdle on the road to Brexit.

And this is just the beginning. The actual negotiations can’t get underway until Article 50 is triggered. Assuming this does eventually happen, the negotiations will have at least three parallel strands: exiting the EU (which will happen two years after triggering Article 50); securing a long-term trade deal with the EU; and securing an interim trade deal with the EU, if the long-term one will take longer to agree. This is not even to mention securing trade deals elsewhere.

Whether we need an interim deal depends on what we want from the long-term one: changing to Norway-style EEA arrangement may be straightforward, but a new, bespoke sector-by-sector trade arrangement of the type government seems to be suggesting will inevitably take longer. (Think how long it takes to rollout any major government reform – Universal Credit, for example). Without an interim trade deal, the country and the EU could face a messy divorce and an economic cliff edge in 2019. It seems likely that all-out efforts would be made all-round to avert this.

Other critical issues on the horizon include Northern Ireland, ensuring that Brexit arrangements do not disrupt the peace settlement, and whether Scotland initiates a new independence referendum. What happens across the EU more widely (particularly within the Eurozone and on the ongoing refugee crisis), the French and German elections in 2017, and even next week’s US elections, could all change the Brexit roadmap again.

All of this of course gives rise to more uncertainty. Financial uncertainty is predictably affecting the markets first, but businesses and the real economy will be next. Public confidence, which has been buoyant so far, may fall as it becomes clearer how hard it will be to fulfill, and reconcile, differing public expectations.

But visibility should improve as we get further along the road. If the government wins its appeal in the Supreme Court and/or a parliamentary vote, the two-year Article 50 process will get underway. The Autumn Statement on 23 November should give a clearer indication of government spending plans and priorities.

For their part, charities will have to prepare for different eventualities. Some need to prepare for potential direct effects (e.g. EU funding cuts, supporting EU nationals), whereas others will want to prepare for possible indirect effects (e.g. rising inflation, continuing squeeze on NHS and local government budgets). Those charities that can contribute to the public debate on the future of the country should feel empowered to do so. For while the Brexit process itself seems all-consuming at the moment, the real debates about the laws, policies and terms of trade that we want in future have hardly begun.

At a charity conference I spoke at yesterday, local charity leaders reflecting on all of this and what it means for them. They talked about developing their own plan Bs and Cs to maintain services. But they also talked about maintaining public trust by remaining non-partisan, ensuring only accurate information was shared (e.g. signposting where necessary to Citizen’s Advice or other trusted sources), and gathering high-quality evidence. They wanted to offer support and reassurance to staff, volunteers and clients; and some would have opportunities to reach out to their wider communities. Above all, at this stage, the message was to keep checking the road ahead but not get diverted from our own missions.

For more Brexit analysis, I'd recommend NCVO's latest briefing: http://blogs.ncvo.org.uk/2016/11/01/four-months-on-potential-implications-of-brexit-for-the-voluntary-sector/