Why no-deal Brexit is looking more likely, and what you can do about it

Sep 06, 2019

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Chris Walker, Public Affairs Manager at NCVO (The National Council of Voluntary Organisations), discusses the current political environment and how charities can prepare.

After the previous deadline for the UK to leave the EU passed and was extended to 31 October, outgoing President of the EU Council Donald Tusk warned the UK not to ‘waste this time’. In the months that have followed we have seen EU parliament elections, a new government determined to leave at the end of October, but precious little in the way of new negotiations. We’ve been advising charities to plan for a no-deal Brexit for some time, but in recent months that prospect seems to have risen to an all-time high.

Why has the likelihood of no-deal increased?

Despite a majority of MPs clearly wanting to avoid no-deal, it has been much more difficult to assemble a majority for any one course of action that would actually prevent it. And as the politics of Brexit have polarised, it has become even harder to see a way forward.

It’s clear that the electoral strategy for the Conservatives is to squeeze the Brexit party by taking a more hard-line approach; promising we will leave the EU on 31 October, and making clear they are prepared to leave without a deal.

Equally Labour have slowly been pushed to a more anti-Brexit line, having to promise a referendum to keep their largely pro-remain supporter base on board. Crucially the European elections showed that their position of ‘constructive ambiguity’ which had previously worked well for them, is no longer a viable option.

This has made it extremely difficult to forge any kind of consensus over a prospective deal or approach, with the recent arguments over a potential government of national unity demonstrating that anti no-deal MPs have their own tensions to overcome.

A more plausible solution would be to pass new legislation to require an extension of Article 50, or otherwise block no-deal. The passage of the legislation initiated by Yvette Cooper and Nick Boles to force the government to request an extension earlier this year, has demonstrated a path to backbench legislation, helped by a willing Speaker in John Bercow. This has however been made harder by the decision to limit parliamentary time by proroguing parliament ahead of party conferences.

The bigger question, however, is less about what MPs can do, and more about what they’re willing to do, and how effective that will be. With too many Labour rebels to make revocation, and probably a second referendum, viable, much may depend on the drafting of legislation being both strong enough to tie the government’s hands, and weak enough to hold together the fragile anti no-deal coalition. And if they are successful, the government could resort to calling an election rather than being bound to a potentially election-losing extension.

Despite these hurdles, no-deal is not inevitable. It remains possible that the Prime Minister could agree something that may be acceptable to parliament – though passing the necessary legislation could be challenging given the likely time constraints. And the closer we get to no-deal the more we might see MPs looking at what had previously been unthinkable options. But while the government remains determined to leave as soon as possible, no-deal seems the most likely outcome.

What should charities be doing?

Given that no-deal is now reasonably likely, charities will need to think about how it might impact on them. Some of these impacts such as the impact on the economy, and potential increases in demand may not be easy to mitigate, but at the very least it’s worth being aware of the possibilities.

One area where there could be immediate issues will be if you rely on goods which are likely to be affected by supply chain issues, particularly if they are time-dependent. Charities with EU nationals among their staff will also need to follow any developments closely, particularly given increased confusion about the government’s approach to EU migration in the event of a no-deal Brexit.

And in the longer term, charities looking to influence policy will need to monitor new legislation and any proposed trade agreements closely to ensure that divergence from the EU doesn’t mean a lack of standards and protections in areas such as the environment and human rights.

We’ll be publishing additional guidance on this, but in the meantime charities should look at some of the resources that are already out there including the Office for Civil Society’s checklist.

Above anything else, this is one of those times when the value of horizon-scanning and foresight are really important, as the only thing we can be certain of is more uncertainty.

The views on this page are those of NCVO.

NCVO is an event partner of Charity Bank’s Road to Growth events, a series of free regional events exclusively for leaders of charities and social enterprises as part of our commitment to support the social sector.

The half-day sessions this September and October will provide insight on the state of the social sector at a time of change. Panelists will share research and insights on the challenges and opportunities that exist and give examples of how charities and social enterprises are responding.

Road to Growth