Much ado about Brexit
23rd September 2019

Much ado about Brexit

As the Brexit deadline of 31 October quickly approaches, the Timber Trade Federation continues to engage with Government and our industry partners through the Confederation of Business Industries (CBI). Below is an update following on from the CBI’s latest Brexit briefing on 17 September.

More than two years following the referendum to leave the EU, it seems uncertainty remains the only reliable certainty. While there are less than two months till the Brexit deadline, there is still much to be determined – including whether the UK will depart the EU on 31 October with a deal.

This persists despite seismic shifts in the UK political landscape, including the rise of Boris Johnston as Prime Minister, an almost clean sweep of Cabinet, the passing of the Benn Act, the loss of whip for 21 Conservative politicians, and the prorogation of Parliament for five weeks.

As a member of the Confederation of Business Industries (CBI), TTF has been meeting regularly with the new Ministers to advocate for the interests of business. Despite speculation from commentators that Boris Johnson is pushing for a No Deal Brexit, the feeling is that he genuinely is seeking a deal with the EU.

There have been some positive notes from the CBI’s meetings with Government for business, with a renewed energy in departments which did not exist under Theresa May, and steadily strengthening working relationships with Ministers such as Michael Gove and Andrea Leadsom.

However, for Brexit good will only goes so far. Meetings between the EU and the UK have been labelled productive, at least by the Prime Minister’s Office, but a viable alternative to the backstop is yet to have been formally proposed or accepted, and this has been highlighted by EU leaders.

Without a deal, the UK and the EU will revert to WTO rules. The TTF has written in the past on how this will affect businesses, and we continue to advise our members to prepare for such a possibility, particularly the additional documentation which will be required to meet EUTR obligations.

Parliament has sought to tie the Prime Minister’s hands and prevent No Deal with the passing of the Benn Act, requiring an attempt to extend the Brexit deadline if an agreement is not reached by 19 October, but Boris Johnson has repeatedly reiterated his commitment to leaving on 31 October.

Speculation is rife that he will avoid such an extension, whether by ignoring the legislation, writing a letter asking the EU for an extension and another letter which denies the first, resigning as Prime Minister, or some other clever loophole yet to be discovered in the Act.

On the EU side, there is a willingness to grant another extension to the deadline, with the European Parliament voting 544-126 to support such a resolution upon Britain’s request. Yet to be determined is the length of any extension. They have also reiterated their commitment to reaching a deal.

What a different deal will appear as is unclear. However, the CBI believes that the most likely result will be a restriction of the backstop to Ireland – a shift back to the Michel Barnier proposal of two years ago which was rejected by Theresa May.

Even as Prime Minister Boris Johnson has lost his working majority, the CBI thinks he is more likely to pass a deal on Brexit than Theresa May ever was due to the loyalty he does command. However, the state of UK politics means an election is imminent. It is just a matter of when.

If a motion were tabled and accepted for an election on the first day of Parliaments return, the earliest date possible would be 28 November to provide for the 25 working days to campaign as required under legislation. The CBI suspects either late November or early December.

However, the Prime Minister’s opponents have so far twice denied him an election, voting down his attempts to call a motion while Parliament was in session at the beginning of September, and Labour say they refuse to support an election before an extension of Article 50 has been passed.

While Boris Johnson and the Conservatives maintain the largest majority in the polls, it does not appear at this stage they will gain an outright majority. But as recent history attests, polls are not always reliable. Voters will likely be split along Brexit, where there are clear differences.

Under Boris Johnson, the Conservatives have sought to anchor themselves as the party of Leave, while Jeremy Corbyn’s Labour are in a middle ground, banking on a second referendum, and Jo Swinson’s Liberal Democrats have said they will reject Article 50 altogether.

Meanwhile the advice for businesses in the UK remains much the same. All industries, timber included, must prepare for possible disruption to their current trading relationships with the EU. Please do look to our Brexit Hub, which we will seek to keep up to date in the coming months.