Has Brexit been agreed?

EU leaders have formally backed Mrs May’s Brexit withdrawal proposals, but will the UK be as keen?

Theresa May’s Brexit deal was given approval in Brussels last Sunday. Leaders of the remaining 27 EU nations quickly nodded through two documents that were almost two years in the making – the Withdrawal Agreement and a Political Declaration about the future relationship between the EU and the UK.

But although this should mean that we finally have a Brexit agreement, it’s a bit early to be opening a bottle of whatever we will drink instead of champagne.

What is the problem?

Mrs May might be congratulated on getting any kind of Brexit agreement agreed with the EU. Many thought it would be impossible, especially when the EU leaders remain committed to the European project and to discouraging any other wavering members from heading for the exit.

But the deal she has agreed is not as favourable as many Brexit enthusiasts have been hoping. If it is okayed, we leave EU on 29^th of March, and enter a transition period, until 31 December 2020. During this time, the UK will be tied to EU rules but lose membership of its institutions – which means we have no control over those rules. The draft withdrawal agreement says the transition can be extended for up until the end of 2022.

Mrs May might have sold it to the rest of Europe. But now she needs to persuade the British Parliament – and possibly the British people.

What happens now?

Remain campaigners took the Government to court to secure a meaningful vote for MPs on Brexit. So, Parliament will be voting before the Brexit proposal can become an agreement.

Eurosceptics including Boris Johnson and Jacob Rees-Mogg seem to be leading Brexiteer Tories in rejecting Mrs May’s deal and calling for it to be renegotiated.

Mr Johnson said it would leave the UK a “satellite state” of the EU, with even less control than it currently has. Jeremy Corbyn’s Labour and Arlene Foster’s DUP also look determined to vote down the deal.

Mrs May is staking her own political future on the hope she can get a majority behind her. She has said the upcoming vote “would be the most significant in the Commons for many years.”

The vote is expected to take place before MPs break for Christmas in December.

What happens if the vote goes against the agreement?

Mrs May doesn’t have enough support to get the deal through, either from her party or the rest of the commons. She has already warned MPs that they will be voting for “more division and uncertainty” unless they back her Brexit deal and insisted that the deal puts the UK on course for a prosperous future. She also urged both Leave and Remain voters to unite behind the agreement.

Brexiteers say that the deal gives away too much. Remainers don’t like the idea of leaving, and those of a pragmatic turn fear that it will end up costing us all money. If she can’t get the deal agreed, the problems really start. It is impossible to say what will happen next.

The default position would be for the UK to leave without a deal.  A no deal Brexit frightens many people.  MPs would have up to 21 days to suggest a way forward, which could be a renegotiated deal, no deal, or even no exit.

It is written into law that the UK will be leaving the EU, but laws can be amended and deadlines extended – but only if all 28 EU members agree. It might even be necessary to have another referendum to see whether the public are behind the deal – or whether appetite for Brexit has waned.

If you are concerned about the effect this uncertainty will have on your financial arrangements, please be certain to call us at Continuum.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.

The value of investments can fall as well as rise and you may get back less than you invested.

Sources:

inews.co.uk – Theresa May’s Brexit agreement rubber-stamped by European Union leaders – 25th November 2018