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Brexit… Where are we now?

Last month we tried to answer the burning question: what does Brexit mean, especially for global mobility? We thought the UK prime minister’s Withdrawal Agreement was ultimately the likeliest option to succeed, and that a no-deal Brexit was unlikely. We also expressed the view that, as long as no-deal was avoided, the challenges for global mobility teams, relating to cost of living, remuneration and moving assignees, would be manageable. A lot has happened since then, so where are we now with Brexit?

Throughout the tortuous Brexit process, the unity and collective wisdom of the remaining 27 EU member states has stood in stark contrast to the infighting and widespread loss of credibility in the single country that is leaving.

That contrast alone should make the United Kingdom think again, but, be that as it may, perhaps some wisdom is finally rubbing off on UK Prime Minister Theresa May. Having failed three times to have her EU Withdrawal Agreement passed in parliament, largely because she couldn’t persuade enough of her own divided Conservative Party to back it, she has at last reached out to the opposition Labour Party for help, meeting with its leader Jeremy Corbyn to try to agree a solution for Brexit. Furthermore, should they not succeed, May has vowed to accept the will of parliament instead.

Combined with MPs narrowly voting through a bill last night to force the prime minister to seek a longer extension to the withdrawal process, May’s conciliatory turn has undoubtedly made a no-deal Brexit even less likely than it seemed to us a month ago. Indeed, a lot would have to go wrong now for Britain to bring that conclusion about; forced to negotiate an extension from the EU, May could surely not turn one down if offered; and the prime minister herself has said parliament would have to request a no-deal scenario before she would allow it to happen (there is a significant majority among MPs against doing that).

If May and Corbyn can agree a plan it could only be for a ‘softer’ Brexit, involving Britain remaining in the EU’s customs union and possibly the single market, with a chance of a confirmatory public vote being attached. Such agreement seems a long shot, but if they fail, parliament will be offered various alternatives to vote on and May has said she will honour MPs’ wishes. Again, the clear majority in parliament is for a softer Brexit (60% of MPs voted for at least one of the various soft options included in indicative votes last week). The Withdrawal Agreement would have to be attached to any such arrangement, so the prime minister is still likely to get her deal through.

While Labour MPs are being given such an influential role, they are unlikely to help the hard-Brexit wing of the Conservatives bring down May’s government, should they even risk that. The hardliners must fear a Labour victory in a subsequent general election, and actually it may suit some of their political ambitions better to carry on agitating for a no-deal Brexit they know will never happen. It sounds tough and undoubtedly has a certain popularity, especially among Conservative Party members, but who would want to risk ‘owning’ such a dangerous venture if it actually came to pass?

So, unless Theresa May goes back on her word, a no-deal Brexit would now only seem a realistic possibility if the EU itself brought it about. Several EU leaders have expressed deep frustration with Britain’s indecision about what form of Brexit it wants, with some even suggesting a longer extension to the withdrawal process is not now possible, at least without a more concrete proposal for a solution from the UK. Others, however, have been more conciliatory. May’s move might only point in the vague direction of progress, but it should nevertheless encourage those EU leaders urging patience, especially as British MPs have confirmed their determination to avoid no-deal.

So, when the British prime minister requests a further extension, as she now must, the EU should offer one long enough (at least to the end of this year) for the UK to sort itself out, even if it can’t yet be certain how it will do that. After all, the worst that could happen, but at a later date and probably with better preparation, would be the very thing every sensible stakeholder is trying to avoid happening next week - the UK leaving the EU without a deal.

The EU would also insist the UK prepares to take part in European Parliament elections in late May, which would provide a huge opportunity for pro-EU forces in Britain to make a bold statement about remaining in the bloc. With momentum for another referendum building by the day, a long extension might even buy the UK time to never Brexit at all.

We’ve admired the EU’s unity and wisdom up to now and strongly believe it will continue to prevail at this late stage of the Brexit process. If so, we can be fairly certain of a soft Brexit at worst, meaning that for most employers (and global mobility teams), changes should be moderate and manageable.

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