Brexit: An update from UK Hospitality

“As you will no doubt have seen from the news yesterday evening, the Cabinet approved the terms of our withdrawal from the EU and the outline future trading agreement. I subsequently had a call with No 10 on the detail and the team, and I have met with Ministers from BEIS and DEFRA. The following is a summary – the text of the outline deal has just been published and is available, but the terms of the political declaration on the future trading relationship are not yet available. We will go through this with a fine-tooth comb to provide a more detailed briefing in due course.

“The Chancellor described the Cabinet agreement as a ‘decisive step forward’ in agreeing in principle the terms of our orderly withdrawal from the EU and the broad terms of our future trading arrangement. We understand that there was not full Cabinet unanimity, and this morning Brexit Secretary Dominic Raab, Work and Pensions Secretary Esther McVey, Northern Ireland minister Shailesh Vara and Suella Braverman, junior Brexit secretary, resigned.

“Full legal text (585 pages) has been agreed with the European Commission and guarantees EU citizens’ rights for those working in the UK – as per our previous briefing, any EU citizen entering before the end of the transition period would have a right to remain to gain settled status. There are new rights for tourists and visitors between the EU and UK to move without visa or additional checks.

“Time limited implementation period agreed and confirmed – initially set to end 31 December 2020. This means all existing rights to work and trade will continue after we exit in March 2019. The implementation period will be used to work out the detail of the future trading relationship. The UK has a sole and sovereign right to extend the transitional period if we are not ready to move to the next stage of the new trading relationship – this is new text and is an alternative to entering the backstop. Crucially the UK alone can trigger this.

“There is a legal commitment in the text that both sides will negotiate in good faith and use their best endeavours to deliver the principles of the future trading agreement which have been agreed today – namely a free trade agreement for goods with zero tariffs or quantitative restrictions; a level of alignment and degree of facilitation to secure as frictionless as possible, trade between the EU and UK and ensure, in particular, the smooth transfer of goods at Dover; a close relationship on services and investment which are specifically named as areas to be covered in the future trading relationship; sectoral cooperation in key areas such as fisheries, energy and security; consensus on a number of other issues to be included in the detailed negotiations.

“The legal agreement on the future trading relationship can only be established once we have left, but the political declaration gives precise instructions to negotiators on what is to be included and covered, and the UK will continue to negotiate further detail on the political declaration text over the next two weeks.

“Next steps – this is currently a deal between the UK and the European Commission negotiating team. It will now be presented to other EU leaders at a special European Council on 25th November when all 27 heads of state must endorse it, and when the final political declaration on the future trading relationship and free trade agreement will be concluded. Negotiations and detail on this will continue right up until 25th November and if the EU Council approves the deal, Article 50 negotiations will be brought to an end and the deal presented to Parliament. Anticipation is that the Parliamentary debate will be held immediately after 25th November and a meaningful vote will take place in early December for MPs to back or reject the proposals.

“The Prime Minister has presented the choices as being this deal, no deal or even no Brexit at all, and Ministers said they were confident of getting support; but the Parliamentary arithmetic still looks questionable and the deal could still be voted down in December. Should this happen we would be heading to no deal contingency planning.

“In light of the importance of a deal for securing a transitional period and underpinning business planning and investment, and, as well as securing the supply chain, we will therefore be working with other business groups and stakeholders to support the Government’s approach. The summary text of the withdrawal agreement and political declaration seem to address the majority of our immediate concerns and the trajectory towards a smooth and orderly Brexit is very welcome. This is inevitably a compromise, but this is a positive and pragmatic set of proposals which protects jobs and the supply chain, and as such is better than the alternative of a no deal or disorderly Brexit.” – Kate Nichols