A Brexit agreement is closer than ever, but with the UK government in disarray, no-deal is still possible. What are the key points of the latest deal?
A Brexit agreement is closer than ever, but with the UK government in disarray, a no-deal outcome is still possible.
British Prime Minister Theresa May finally broke a Brexit deadlock on 14 November by securing agreement on a withdrawal deal from both the UK cabinet and EU negotiators. President of the EU Council, Donald Tusk, subsequently scheduled a special EU summit on 25 November to finalise the draft agreement.
However, the announcement was immediately followed by disorder within the UK government as several high-profile ministers resigned in protest at the deal – including the Brexit secretary, Dominic Raab.
With much dissent within UK ranks, this puts into question whether the deal will achieve the “meaningful vote” it requires in British Parliament to become law. There is also much speculation about a potential vote of no confidence in the Prime Minister, which could bring a change of leadership that could push the UK’s approach in various directions – including a harder Brexit, a no-deal departure, another referendum or even no Brexit at all.
So what are the key points of the deal that is on the table?
The Prime Minister has agreed to settle the UK’s financial obligations to the EU, expected to cost approximately £39 billion over a number of years.
As per the citizens’ rights agreement announced earlier in the year, the deal maintains existing residency rights for those already settled in the UK and the EU before the Brexit cut-off date.
This means that UK nationals already living in an EU state can remain there and “continue to have broadly the same access to healthcare, pensions and other benefits” as today while they remain resident in that country. Retirees will therefore continue to have their healthcare covered and receive annual inflation increases in the State Pension, and close family members will be able to join existing residents at any time. Residency rights will only be forfeited after being absent from a country for five years.
But, with no amendments from the original draft deal, there are no guarantees regarding onward freedom of movement. As a result, UK expatriates could effectively be ‘locked’ within their country of residency when Brexit starts, leaving them unable to work or reside in another EU state without having to apply to do so as a third country (non-EU/EEA) national.
The 21-month period agreed in March still applies, set to delay the Brexit cut-off date until 31 December 2020. During this time the same freedom of movement, residency rights and associated benefits will continue. The new deal includes an option to further extend the transition for an unspecified period at the UK’s cost; the latest possible date for this is expected to be clarified at the EU summit on 25 November.
During the transition period, the intention is to reach a trade deal and agree a permanent solution to the Northern Ireland customs border issue. Throughout that time, the UK would be bound by EU rules – including remaining under the jurisdiction of the European Court of Justice (ECJ), but will have no voting rights within the bloc.
A “backstop” is in place as a safety net to avoid a hard border if an alternative solution is not secured before the end of the transition period. If required, the backstop will take the form of a temporary customs union for whole of UK – “a single customs territory” – but with stronger ties for Northern Ireland. The UK can only end the backstop arrangement after EU agreement.
The deal includes a ‘Protocol’ that Gibraltar will continue to be treated as a UK territory during any transition period and will be subject to final Brexit negotiations.
What happens next?
If Mrs May retains leadership and her proposed withdrawal deal maintains enough government support, it is set to be formally agreed by the EU27 in the emergency summit on Sunday 25 November.
The deal would then move on to a vote in the UK Parliament in December. If it wins majority support in both houses, the EU Withdrawal Bill will be introduced in the new year. A majority vote in the European Parliament would be needed to ratify it there (agreement from 20 or more member states, representing at least 65% of the EU population).
However, if the deal is voted down by the UK Parliament, the government has 21 days to propose a new plan. This could include leaving without a deal, renegotiating with the EU, calling a General Election or undertaking another referendum.
While the deal is closer than it has ever been to being resolved, there is still much uncertainty. As before, we have to wait and see how things unfold before we can presume there will be a no-deal outcome. With only four months until the Brexit deadline, it is crucial that UK nationals wishing to permanently reside in the EU take urgent steps to formally establish their position in their country of choice.
Read our article ‘How to get your finances Brexit-ready’
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