Government will struggle to ‘Get Brexit Done’ by December 2020

Very little will change when UK leaves the EU on 31 January. The transition period (or implementation period) will kick in and the UK, despite leaving the political institutions of the EU, will largely continue to follow EU rules and take part in EU programmes.

But the Brexit task will be far from over. While much of the first phase of negotiations focused on being able to agree the terms of withdrawal from the EU, the government will instead need to use the next 11 months to make sure the UK is ready for all the practical challenges that the UK’s changing relationship with the EU will entail. It will need to pass legislation, prepare for new domestic policies and make sure businesses are ready for huge changes in how they interact with the EU. All this without yet knowing the details of the UK's future relationship with the EU.

Given how much effort this will involve, the proposed timeframe looks positively heroic. 

There are big questions over how to implement the border between Great Britain and Northern Ireland

The biggest change from Theresa May’s withdrawal agreement was in the Northern Ireland protocol, with Boris Johnson agreeing to create a trade border in the Irish Sea to avoid a hard border of the island of Ireland. This commits Northern Ireland to continue following EU regulations for goods, and means that Northern Ireland will need to follow EU customs rules even though it will remain in the UK customs territory.

How this will actually work is yet to be agreed. The EU and UK deferred some of the big decisions to the joint committee which oversees the withdrawal agreement. The committee, which will be made up of EU and UK representatives but is not yet established, will need to look at how the complex customs arrangements – and regulatory checks between Great Britain and Northern Ireland – will work in practice. The level of ‘unfettered’ access between Northern Ireland and Great Britain is also unclear. Making practical changes on the ground will also be influenced by the nature of the future trading relationship between Great Britain and EU.

Given the complexity of these challenges, it seems highly unlikely that the government will be ready to have a post-Brexit border in operation by December 2020 – and a failure to fulfil its obligations under the withdrawal agreement could see the European Commission launch infringement proceedings against the UK government. This could ultimately see the UK up in front of the European Court of Justice.

Getting government ready for 1 January 2021 is a huge task

The government will also need to be prepare for what happens on the ground when the transition period ends. After Brexit, the UK will ‘take back control’ of its fisheries, agriculture and immigration policies. It will also be able to strike trade deals with other countries for the first time in over 40 years. This will require legislation, putting in place new systems and processes to be put in place and, quite possibly, setting up new public bodies – or extending the remit of existing ones.

The changing relationship with the EU will also likely introduce new friction to the border – although the extent will depend on where the negotiations end up. While the prime minister has indicated a preference for a more distant economic relationship with the EU – meaning some of the work already gone into no deal planning can lay the foundation for this change – government will need to make sure the changes are sustainable rather than just mitigating the worst impact.

Negotiations will likely continue beyond 2020 – which will make it harder for businesses to prepare

The endpoint for the future relationship with the EU will have a huge impact on the extent of the changes which will follow Brexit. Although the political declaration proposes a wide-ranging future relationship beyond trade, including data-sharing, fishing rights and security co-operation, the government’s determination not to extend the transition period means that a limited goods-only Free Trade Agreement is likely to be prioritised. Other aspects of the future relationship will be left to be negotiated after December 2020.

But these trade-offs won’t be made clear until the 31 December deadline is nearly reached, making it much harder for business to know how to prepare for life outside the EU. A trade deal normally involves a phased implementation period, but there is no indication that government is giving this consideration. To anticipate any possible disruption, businesses might choose to prepare for a scenario in which no agreement is reached on the future relationship – a course of action which could diminish the value of any agreement.  

Securing a Brexit deal by 31 December is almost certain to require ambitions to be limited, and over the next 11 months both government and businesses will face difficult choices. Wherever the negotiations end up, Brexit will dominate the government’s to-do list beyond 2020.