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Brexit in a page - what do I need to know? | 24 April 2020

Brexit expert, Jacqui Bickerton, provides her latest weekly summary on Brexit.

Weekly reflection

  • Tuesday of this week saw a marked decrease of the UK Pound against the US Dollar due to a raft of reasons. However, even though the UK and EU talks have recommenced on trade, fears are mounting for investors over the risk of a no-deal Brexit at the end of 2020. The UK government are firm that there will be no extension to the transition period beyond 31 December 2020.
  • Following the prolonged period of uncertainty caused by the Brexit referendum, the UK housing market entered 2020 with a spring in its step. Mortgage approvals, according to the Bank of England’s data, rose to 73,546 in February 2020, being the highest approval rate since January 2014. The Brexit recovery had begun. However, due to the current pandemic and restrictions on movement, the Chief Economic Adviser to the EY Item Club has reported a significant decrease in house prices and market activity. This, coupled with the threat of no-extension to the transition period, is causing heightened uncertainty across the housing market.
  • The Federation of Small Businesses has this week expressed its concerns for businesses should a trade deal not be reached between the UK and EU by 31 December 2020. The prospect of tariffs on exports is not something UK businesses welcome. Mike Cherry, Chairman of the Federation said “Securing this agreement is critical to the many small businesses that trade with the EU single market and EU customs union. We want these businesses to have tariff and quota free access as well as seeing non-tariff barriers kept to a minimum. This can only be achieved if government and the business community work together”.
  • The British International Freight Association (“BIFA”) have also expressed views this week on the transition period and its purpose. Whilst the UK government intends to finalise a trade deal in sufficient time for implementation on 1 January 2021, the transition period was also designed to allow time for businesses to prepare for the new rules. However, in order for this happen, any trade deal will need to be agreed in totality by October 2020. The Director General of BIFA, Robert Keen said “In light of the huge issues involved with a sharp change in trading conditions at the start of 2021, particularly if that were to coincide with another COVID-19 outbreak, we think an extension looks increasingly likely. There has been little meaningful consultation with UK trade regarding the policies and procedures required in order to ensure that trade with the EU can continue relatively uninterrupted post December 31, 2020”.
  • Meanwhile, Michel Barnier, the EU’s chief negotiator has said that the EU are aiming for “tangible progress” to be made on the trade talks with the UK by June. This statement came on the back of the first day of renewed discussions this week. However, the EU remain of the view that a complex and comprehensive agreement is beyond reach in the time remaining.
  • Finally, it is reported that the UK Brexit negotiators this week have requested, during negotiations, its continued access to Europol’s central intelligence database following the end of the transition period to assist with the fight against terrorism. The UK argue that a refusal by the EU to its offer of strong cooperation will lead to a mutual loss in capability to fight crime. The UK have also expressed an interest in continued data sharing of the Schengen Information Systems which contains approximately 90 million entries of information used by the European border control agencies. However, Christian Petry, spokesperson for European affairs to the Social Democratic Party (forming the German government) said “The Brexiteers have always disparaged the EU as undemocratic. To now dictate to the EU as a third country how we should organize our inner security, that would indeed be undemocratic. It would not be ‘cherry-picking on speed’, but set a fatal precedent”.

Key dates

April 2020
Trade deal negotiations to resume.

11 May 2020
Further trade deal talks between the UK and EU.

June 2020
Final date for the UK to request an extension to the transition period.

June 2020
EU Summit to assess the progress of talks.

26 November 2020
End date for the trade deal to be finalised.

31 December 2020
End of the transition period.

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