Legal Experts React To Confirmation Britain Is Facing A Hard Brexit
Legal experts from Irwin Mitchell say that British businesses must brace themselves for further uncertainty after the Prime Minister confirmed that Britain will be leaving the single market as part of her Brexit blueprint.
During her much anticipated speech today (TUES) Theresa May said the UK "cannot possibly" remain within the European single market, as staying in it would mean "not leaving the EU at all".
The pound began to climb as the PM vowed to push for the "greatest possible" access to the single market following Brexit.
She also announced that Parliament would get a vote on the final deal agreed between the UK and the European Union and promised an end to the UK's "vast contributions" to the EU.
Business experts from national law firm Irwin Mitchell were closely following the speech, in which Mrs May announced the 12 priorities for Brexit negotiations, to decipher the legal impact for British firms and employers.
The plans included maintaining the common travel area between the UK and Irish Republic, tariff-free trade with the EU, a customs agreement with the EU, continued "practical" sharing of intelligence and policing information and “control" of immigration rights for EU citizens in the UK and UK citizens in the EU.
Still intending to trigger Article 50 and begin the official Brexit process by the end of March, she said: "This agreement should allow for the freest possible trade in goods and services between Britain and the EU's member states.
"It should give British companies the maximum possible freedom to trade with and operate within European markets and let European businesses do the same in Britain. But I want to be clear: what I am proposing cannot mean membership of the single market."
Partner and employment and immigration expert, Omer Simjee said that the PM’s had thrown a recruitment gauntlet down for businesses by pushing for a ‘clean’ Brexit.
Commercial expert and Partner, Laurence Gavin said knowing the Government’s plan wasn’t a signal that businesses could lower their guards and that real long term certainty would only be gained after a final Brexit deals have been negotiated and agreed.
Expert OpinionNow that Theresa May has revealed her hand, businesses need to start preparing for a hard Brexit, without access to the EU single market. The Government’s stated intention is to negotiate a free trade agreement with the EU including a customs agreement, but there is no certainty of outcome and Mrs May recognised this, saying that no agreement with the EU would be preferable to a bad agreement.
Businesses therefore need to prepare themselves for tariffs on manufactured goods of all sorts and food products, the cost of which will either have to absorbed by companies or passed onto the consumer, with unpredictable results. Supply chains may face disruption, particularly in industries such as aerospace where EU-wide accreditation is important.
The financial services sector is also important to the UK economy and a hard Brexit is likely to mean that businesses in the sector will lose their passporting rights, although negotiating an equivalence deal for some types of business will be a priority for the Government. This area will be closely watched but we can expect banks and insurers to move some staff to EU financial centres, a trend which has already begun, and to set up subsidiary companies within the EU.
Businesses are already sailing through choppy and unchartered waters the uncertainty will continue while the settlement with the EU is negotiated, notwithstanding that certainty is Mrs May’s first principle for the negotiation. The practical advice is to stay flexible and have both short and long term plans to cover all eventualities. Laurence Gavin - Partner
Head of Real Estate, Paul Firth said that a hard Brexit presented both opportunities and risks for property investors.