Ready Brexit: all systems go

13-03-2017

By Gillian Fawcett, Head of Governments, CIPFA

Parliament has cleared the way for Brexit. It’s been a balmy few weeks and we are now counting down the days for the government to invoke Article 50 of the Lisbon Treaty before the end of March 2017, meaning the UK will be expected to leave the EU in two years.

Following a Supreme Court ruling in January that set out that Parliament must be consulted before invoking Article 50, the Brexit Bill has worked its way through Parliament. Firstly, it was approved by the House of Commons and was amended by the House of Lords to include two new clauses, including guaranteeing the rights of EU citizens residing in the UK and a ‘meaningful’ parliamentary vote. In relation to the latter change, the government suffered a second Brexit defeat in the House of Lords as peers, backed by 366 votes to 268, called for a 'meaningful' parliamentary vote on the final terms of withdrawal. 

These initial changes to the Bill were not without collateral damage, Lord Heseltine, who was one of 13 tory peers to rebel and back the demand for a parliamentary vote, was fired from the five government advisory roles that he had held. His sacking seems a little unnecessary given that the Bill has now cleared the Houses of Parliament, having had the two amendments overturned by the House of Commons. The 'meaningful vote' amendment was rebuked by a majority of 45 in the Commons and the amendment on EU national rights was defeated by 335 to 287 votes. Now that the hurdles are cleared the government is confident that Article 50 will be invoked by the end of March. 

Meanwhile, back at the office, the ‘Three Brexiteers’ (David Davis, Secretary of State for Exiting the European Union, Liam Fox, Secretary of State for International Trade and Boris Johnson, Secretary of State for Foreign and Commonwealth Affairs) remain on standby to spearhead the negotiations to leave the EU within two years. Although leaving the EU is expected to take two years, no one really knows, as Article 50 has never been used. In addition, the likelihood of getting at least 65% of the 27 member states to agree to a deal is potentially a game of ‘Russian roulette’ that could spin out negotiations well beyond six years. Some commentators forecast ten years or more.  

There are choppy waters ahead on both sides of the channel as Jean-Claude Juncker, European Commission President, fears the UK will divide the European Union's 27 remaining members by making different promises to each country during its Brexit negotiations. This reflects Angela Merkel’s earlier concerns about the UK ‘cherry picking’ deals with countries. There will be testing times ahead as Brexit tests the strength of the European bloc.

As if all of this hurly burly wasn’t enough, Chancellor Philip Hammond squirrels away cash to shore up the UK’s resilience to economic turbulence as it withdraws from the EU. Writing in The Sunday Times, he warned that it would be 'reckless' to turn on the spending taps before Brexit in 2019. While he announced spending plans to relieve some of the pressures on the NHS and social care, it shouldn’t be of any surprise that he is also setting aside reserves to deal with the impact of Brexit – it would be the prudent thing to do!

It’s hard to believe that nine months after the decision was made to leave the EU we are still only at the beginning of the process. The machinery of government has changed with the establishment of the Department for Exiting the European Union to co-ordinate the government's negotiating plans. It is meant to be a temporary arrangement to see through the two years of negotiations, but the budget for the department has been set until 2020. 

At a recent Institute for Government (IfG) event, Sarah Healey, Director General of the Department for Exiting the European Union, portrayed a rosy picture about the creation of the department and its ability to be flexible and responsive to deal with the challenges ahead. While much of the conversation was about highlighting the legal and parliamentary skills necessary for a successful negotiation strategy, very little was said about the financial skills that would be needed to understand complex financial deals in areas such as agricultural policy. It as striking that the finances were under played. 

With both finance in mind and the political turmoil here and over the water we are still no wiser as to how much Brexit is costing the UK taxpayer. In the interests of improving accountability, public trust and confidence in the process of exiting the EU, we call upon the government to publically report on the costs relating to Brexit. The clock is ticking and so are the costs too.

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