Has a Brexit deal been reached?

Has a Brexit deal been reached?

Theresa May has announced that a draft of a negotiated Brexit deal is ready to be shared with the Cabinet in an emergency meeting at 2pm today

On Wednesday 14 November 2018: Theresa May has made the announcement that a Brexit agreement has been reached. Later this afternoon, there will be an emergency Cabinet meeting in which the contents of the 500 pages will be considered.

Andrew Gray, head of Brexit at PwC, has said: “We welcome the news that the negotiations have progressed, and a deal seems now to have been reached between the EU and the UK. However, there are still a number of hurdles to be jumped before the deal is binding.”

Head of Brexit at KPMG, James Stewart, has agreed with Gray. He said: “Today’s cabinet discussions on the draft text mark a big step forward in the construction of a Brexit deal, but there remains a long, hard road to travel before any final agreement is clinched. The businesses we are speaking to are cautiously welcoming the progress being made. However, they are under no illusions about the pitfalls that lie ahead, the potential for an impasse being reached, and the absence of detail on the UK’s future trading relationship with the EU.”

Noteworthy inclusions in the draft cover the likes of the Northern Ireland “backstop”, which has been negotiated in order to avoid a hard border with the Republic of Ireland. Furthermore, citizens’ in the UK will be allowed a potential 21-month transition period (starting from 29 March 2018), and more cohesive details of a £39bn divorce bill will be revealed.

Despite this draft being a step in the right direction, May will still need to have it approved by the cabinet, by ambassadors from the remaining 27 EU states at an emergency summit later in the month, and, perhaps most challenging, parliament itself. It can therefore be assumed that economic and societal stabilisation will not be expected any time soon.

“Businesses that crave certainty and detail will have heard very little in recent days to make them feel they can now relax,” Stewart added.

David Noon, global Brexit leader at Deloitte, stated: “Businesses who have taken a ‘wait and see’ approach to Brexit need to get the ball rolling on their plans and be prepared for all scenarios. The impact on supply chains and access to talent are high on the agenda. However, companies should not overlook the direct and indirect effect on data flows, funding requirements, and maintaining contract coverage. Ultimately, businesses need to be ready to adapt to whatever outcome – those that can do so quickly will be winners in the long-term. Uncertainty will continue for some time, so our recommendation is that businesses maintain their focus upon planning for a wide range of outcomes.”

Stewart further outlined that until “there is a broader political alignment and fewer risks, business leaders have little option but to continue to assume that the quest for a deal could yet be derailed.” As a result of this, the UK’s business industry will most likely remain cautious in the next few months; the government’s attempts to kick-start innovation will still involve struggle, but it has been a long while since anyone has seen Brexit progress of any kind. What unfurls at the Cabinet meeting today at 2:00pm will be very interesting, indeed.

As Gray concluded: “Whilst there is still uncertainty about the exact details of our future relationship with the EU, the emerging political agreement will provide helpful clarity on the boundaries of the relationship, which should allow businesses to progress with medium-term planning for post-Brexit scenarios.”

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