The future UK-EU relationship – what is next?

“The election result represents a decisive choice by the UK electorate to proceed with leaving the EU and makes any reversal of that policy extremely unlikely. While leaving the EU undoubtedly carries considerable economic challenges for the UK, the majority that the Conservative Party enjoys in the UK Parliament gives it the power and responsibility to carry that through in the way it perceives will most benefit the country.” – Dorothy Livingston, Consultant

The outcome of the 2019 UK General Election was revealed today. It was confirmed that the Conservative Party had returned to Parliament with a majority of Parliamentary seats (the Conservatives now hold 364 seats, whilst the Labour Party holds 203 seats with other parties far behind). This is the largest majority that the Conservative Party has enjoyed since the 1980s.

The Conservative Party intends to press ahead with its plans to leave the EU by the end of January 2020. Although, under the terms of the flextension agreed with the EU in October 2019, the UK could leave at the end of December 2019, it is most likely that the time needed to complete all the necessary Parliamentary steps to approve the Withdrawal Agreement will mean that the UK will leave the EU at 11pm GMT on 31 January 2020 on the terms of that Agreement, as they were negotiated before the UK General Election - see our Withdrawal Agreement Q&A.

Following its departure from the EU, the UK will enter into a transition period. This means that EU law will continue to apply in the UK until the end of the transition period and immediate changes associated with leaving will be small and, if they occur, more likely to affect UK trade with very few third countries than with the EU.

The transition period may only last until the end of 2020, although it could be extended to the end of 2021 or 2022: see Leaving the EU – The process and preparations section of our Brexit Legal Guide. The UK Government’s intention is to leave the transition period at the end of 2020, which carries some risk of leaving before a new trade deal can come into force, and also may limit the scope of what can be agreed.

The European Council, in its recent Article 50 Conclusions, reiterated its commitment to an orderly withdrawal on the basis of the agreed Withdrawal Agreement and desire to establish as close as possible a future relationship with the UK in accordance with the non-binding Political Declaration.

If you would like to discuss specific arrangements for support on planning ahead for Brexit, or on any other questions or challenges you have, please do contact your regular Herbert Smith Freehills contacts, or any of our experts listed here.