The UK Supreme Court has ruled that an act of parliament must be passed before the UK government can withdraw from the European Union. The move adds a further process to the Brexit plight and throws more uncertainty into the picture for businesses.
Following the ruling, the government must now propose a bill, that will be subject to scrutiny by opposition parties and both the House of Commons and the House of Lords. Secretary of state for exiting the EU, David Davis says the government expects to introduce legislation “within days” and that the timetable for invoking Article 50 by end March still stands.
“This will be the most straightforward bill possible to give effect to the decision of the people and respect the Supreme Court’s judgment. The purpose of this bill is simply to give the government the power to invoke Article 50 and begin the process of leaving the EU. That is what the British people voted for, and it is what they would expect,” says Davis.
The court ruling has raised some concerns for businesses in terms of contingency planning.
“The practical impact of this ruling, not the political intricacies, is what interests business communities across the UK. What businesses will want to know is whether this ruling will affect either the terms of the government’s approach, or the timeline that firms across the UK have been told to expect,” says director general of the British Chambers of Commerce (BCC), Adam Marshall.
“Businesses will also want to see action to ensure that this further political wrinkle does not add further to the volatility of exchange rates.”
In a select committee hearing ont he day of the decision, three of the UK’s major industries – aerospace, automative and chemicals – were called on to give evidence of their concerns. Senior executives warned that they could cut investment if they had to bear extra costs as a result of Brexit and that a number of companies are holding off on investment decisions until the terms of Brexit are clarified
All three highlighted that leaving the single market and customs union left their industries vulnerable to extra costs and delays such as costly duplication of regulations and damaging constraints on moving staff and parts freely around operations that spanned several countries.
Airbus COO, Tom Williams, warned that the UK was entering a “dangerous phase” where competitors in other countries would seek to profit from any uncertainty or cost burden arising from Brexit.
“Passing this bill in the House of Commons should be relatively straight forward. It’s not yet clear how much difficulty the government will have passing the bill in the House of Lords,” chief economist at Global Counsel, Gregor Irwin tells GTR.
“It’s unlikely that that is going to delay the triggering of Article 50 beyond the end of March.”
Most major opposition parties agree that the decision to leave is a done deal, and argue they will not try to stop nor frustrate the process. The legal challenge, which was brought forward by business woman Gina Miller and hairdresser Deir Dos Santos, was argued as a push for a more democratic and legally sound procedure on what is the most important issue the country has faced for a generation.
“All of the opposition parties are going to propose amendments to that bill. They want to ensure proper parliamentary scrutiny and that parliament has a meaningful vote,” says Irwin.
Leading opposition party, Labour, has also stated that it wants a more detailed white paper on the government’s Brexit plans to allow for more debate and the opportunity to consult with constituencies. The call is supported by Scottish nationals as well as ruling party backbenchers. During prime minister’s question time the following day, Theresa May agreed to publish a white paper accepting there was an “appetite” for such a document. Whether the White paper would be published ahead of Article 50 being invoked was not clarified.