Policy briefing: Brexit update

29 October, 2018

 

It’s crunch time for Brexit; this month Theresa May announced that the government’s deal was 95 percent complete.

Brexit has proven notoriously difficult to predict – and not just in terms of the referendum outcome. The direction that the political processes could take is also subject to a number of factors, each of which could see it take a drastically different turn.

No deal is an increasingly plausible outcome and VCSE organisations need to make sure that they are prepared for the uncertainty that would result from this.

In this briefing, we provide our members with an overview of:

 

How Brexit is progressing

The UK Government is aiming to present a proposed Brexit deal to parliament in November. Currently, the negotiations with the EU are approximately 95 percent complete; however the remaining talks will be over the contentious issue of the Irish border and its impact on trade and tax duties.

The government’s Brexit plan, ‘dubbed the Chequers Deal’ is mainly aligned with existing EU requirements – better known as a ‘soft Brexit’.

The government will need to get its proposal approved by a parliamentary vote before being agreed by the EU.

The official date for leaving the EU is on the 29 March 2019, however this will mark the beginning of a transition period that will last until 31 December 2020. Upon entering this period most EU legislation will continue to apply under UK law but will be phased out by the end.

A no deal situation – where the UK and EU fail to come to a formal agreement on the practicalities of Brexit – is a plausible outcome and so we are recommending that VCSE take steps in order to prepare.

 

What regulatory issues should VCSE organisations consider?

Free movement of people and employment law – concerns have been voiced by both health and social care providers and universities as both of these sectors depend on the free movement of people in order to function. The government has published a white paper saying that EU citizens should be able to enter the UK freely without a visa for tourism and temporary work purposes and that they should be allowed to study in the UK. However, it also stipulates that the free movement of people should end by 2020.

VAT – will continue to apply until we exit the EU. The current ‘no deal’ contingency plan on GOV.UK states that there would be no immediate change to VAT rules, except regarding some exports. Charity Finance Group has identified tax reform as one of the missed opportunities of Brexit.

Procurement legislation – will continue to apply – including a ‘light touch regime’. This will have implications for certain health, social, education contracts.

GDPR – will be incorporated into UK law the moment we leave the EU. This is to enable the free flow of digital communications between the UK and Europe.    

 

What should the VCSE sector do?

1 – Prepare for potential new laws and regulations. Look at what legislation governs your work and consider how this might change if it were governed from Westminster. Put in place a process to mitigate this.

2 – Support EU nationals. If you have any EU nationals working for you then this is likely to be a very uncertain time for them and their families. Aside from providing emotional support, be prepared to support them in understanding their rights and filling in any new paperwork that might be required.

3 – New ways of working. Post-Brexit Britain could see an economic downturn and greater need for VCSE services. Funding through sources such as the Shared Prosperity Scheme is likely to be accessed in a different way and could address different priorities. VCSE organisations will need to be nimble and adjust to their changing environment.

4 – Fight to get social issues on the agenda. With the government focussing so much on Brexit, it would be easy for many social issues to be side lined and not given the attention they deserve. Our sector will play a key role in ensuring that the wellbeing of people, places and the environment continue to be at the forefront of the national conscience.

5 – Continue to apply for funding. The government has stated that it will underwrite successful structural and investment fund bids up until the end of 2020 and voluntary organisations are encouraged to continue to apply for them. The Shared Prosperity Fund is set to replace EU structural and investment funds, however very little detail has been provided on this other than the fact that the government intends to consult on it later in the year. Very recently, UKRI has been appointed to manage funding that will replace that which was formally available through the Horizon 2020 programme.

 

Will there be a no deal?

No deal is where the UK and EU fail to come to a formal agreement on the practicalities of Brexit. The impact of no deal is unclear. Some envisage it as a far less certain version of a hard Brexit; however, the government has released a contingency measures for many that would make it ‘business as usual’ but outside of the EU for many critical organisations and operations.

Both the EU and the government have said that they want to avoid a no deal situation. However, the large number of pro-Brexit Tory rebels mean that the government may find it difficult to get the bill through parliament. There are also still differences between the UK and EU that could see the bill rejected by the EU – this could be more likely if the proposal gets amended by pro-Brexit rebels.

The overall result is that a no-deal Brexit is a plausible outcome and Bristol’s VCSE sector needs to prepare.

 

The Brexit picture in Bristol

  • Bristol Mayor Marvin Rees has launched and is personally chairing the city’s Brexit Response Group. This has met twice and discussed a number of local contingency plans – in particular relating to the supply of food and medicines. Voscur raised the lack of clarity over successor funding arrangements and issues over employment and the workforce as specific areas of concern for the VCSE sector
  • The council has provided online citizenship support for EU nationals
  • It has also released the Bristol and Brexit Guide outlining the city’s requirements from government on Brexit.

 

Further sources of information

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