The move brings to an end months of political wrangling, including Prime Minister Boris Johnson negotiating a new withdrawal agreement and political declaration with the European Union and subsequently being required by Parliament to write to the European Union, under the Benn Act, to request an extension, which was granted by the EU on 28th October 2019.
However this is not the end of Brexit, with the issue set to dominate the General Election on 12th December 2019 (this date is provisional until the Early Parliamentary General Election Bill 2019 has passed through the Parliamentary process). Indeed, even had Boris Johnson been able to get Parliament to ratify the withdrawal agreement then there would still have been many months, and some would say likely "years", of difficult negotiations to agree a new Free Trade Agreement with the EU.
What this change to 'exit day' means in practice is that "no deal" scenario plans for 31st October 2019 will not fully enter into force at this time, but the threat of this happening is far from over and depending on political developments may simply re-emerge again at the end of this new extension.
Many businesses may welcome the immediate threat of "no deal" having been avoided, but will not welcome the continued uncertainty and the knowledge that the same contingency planning for a "no deal" scenario may need to be repeated. For example, stockpiles of goods that many businesses have built up may be maintained but to the extent such goods are at all perishable then adjustments will be required to avoid waste, and the exercise may simply end up being repeated early next year if "no deal" becomes a potential end point.
In terms of the legal mechanics behind Statutory Instrument 2019 No. 1423, under the s.20(4) of the European Union (Withdrawal) Act 2018 a Minister of the Crown may "amend the definition of “exit day” … to ensure that the day and time specified in the definition are the day and time that the Treaties are to cease to apply to the United Kingdom". This provision has already been amended twice before, to move the original exit date of 29th March 2019 to 12th April 2019 and thereafter to 31st October 2019. In terms of the new exit date of 31st January 2020, it should be noted that this date could be moved forward if the Withdrawal Agreement is ratified earlier, which would seem plausible if Boris Johnson obtains a majority in a December election. Therefore, this latest extension simply means that the plethora of legal changes that were destined to happen upon 31 October 2019 will now be delayed, albeit not removed.
With politics in the UK currently polarised around the issue of Brexit, this latest delay will be welcomed by those seeking another referendum or to revoke Article 50 but will further frustrate those eager to push ahead with leaving the EU. Ultimately, this extension effectively just prolongs the uncertainty while an election can be held. Indeed, the election on 12th December 2019 is likely to be fought primarily around promises to resolve Brexit (although issues such as the NHS and policing are also expected to feature heavily). Therefore although Brexit is delayed in this instance, the best advice is continue to prepare in readiness for the next deadline of 31st January 2020.
Jonathan Branton and Alexander Rose
31 October 2019
DWF Law LLP has a breadth of expertise in Brexit related matters. We are able to draw upon a team of leading experts, in our UK, Brussels and other international offices, who have extensive experience in this area, including working within the UK Government on Brexit matters, within the European Commission and helping business leaders quickly adapt to new laws and regulators.