Jessica Fino 20 Mar 2017 05:13pm

Article 50 trigger date: political and business reaction

As both the business and political world reacts to the news that Article 50 will be triggered next week, the Institute for Government (IfG) has warned that Brexit will place a “huge burden” on both Parliament and government departments

The government said on Monday it will trigger Article 50 of the Lisbon Treaty on 29 March, formally starting the starting the process of negotiation to leave the European Union.

The news came one week after Parliament passed the Brexit Bill, with MPs overturning amendments aimed at guaranteeing the rights of EU citizens in the UK, and four days after the Queen gave her royal assent.

Tim Barrow, the UK’s permanent representative to the EU, informed the European Council of its intentions to invoke Article 50 next Wednesday.

David Davis, secretary of state for exiting the EU, said, “Last June, the people of the UK made the historic decision to leave the EU. Next Wednesday, the government will deliver on that decision and formally start the process by triggering Article 50.

“We are on the threshold of the most important negotiation for this country for a generation.

“The government is clear in its aims: a deal that works for every nation and region of the UK and indeed for all of Europe – a new, positive partnership between the UK and our friends and allies in the European Union.”

Donald Tusk, president of the European Council, reacted to the announcement on Twitter by saying, “Within 48 hours of the UK triggering Article 50, I will present the draft Brexit guidelines to the EU27 Member States.”

A spokesperson for the European Commission said it was “ready to begin negotiations” and it had “everything ready and decided”.

In a press conference, Margaritis Schinas, said, “The first step after the notification will be the adoption of guidelines by the European Council. The commission will then immediately release a recommendation to open the negotiations.”

Business reaction

Reacting to the confirmation of the date, Karen Briggs, head of Brexit at KPMG said, “Although the UK’s substantial financial contribution to the EU and its status outside the Schengen Area offer the opportunity for a unique deal to be struck, businesses still need to plan for a ‘no deal’ scenario.

"Companies also need to understand the point of no return beyond which they must invest in contingencies.

“Firms are relying on the government to deliver a smooth and orderly Brexit. This will be essential in more regulated sectors like financial services, pharmaceuticals and energy. Rather like flying, people will tolerate some turbulence so long as they can trust a predictable system.

The Big Four firm said it identified five issues of concern for businesses, which included access to labour, additional tariffs and non-tariff barriers, the uncertainty of a closed negotiation process, the potential for a cliff edge situation and the long lead times that come with major legal changes, relocation and revised supply chains.

Briggs added, “Our work shows that banking, insurance and industrial manufacturing are the best prepared so far with automotive, life sciences, plus transport & logistics not too far behind. Of course some firms aren’t yet preparing for Brexit, this could hamper interconnected supply chains.”

Mike Cherry, national chairman at the Federation of Small Businesses (FSB) said next Wednesday will need to be the “starting gun for a pro-business Brexit”.

Cherry said, “Smaller businesses want to make sure that easy access to the EU single market and the right talent feature prominently in the forthcoming negotiations.

“The right to remain for these non-UK EU citizens must be guaranteed at the earliest opportunity to provide reassurance to smaller firms and their work forces. Settling this issue is crucial to business owners and the economy.

“In addition, any future immigration system must ensure that small firms can easily recruit the right person, for the right job, at the right time without adding additional administrative burdens on already time and resource strapped small businesses.

“Just as importantly, the government needs to provide additional support to small businesses to ensure they can capitalise on new trade opportunities with non-EU markets post-Brexit."

Several other business organisations such as the Confederation of British Industry and EY said they would be commenting on the Article 50 triggering next week, when the process to leave the EU official starts.

Political reaction

Meanwhile, it was reported that representatives from Scotland, Wales, and Northern Ireland only heard about the Article 50 trigger date from the media.

Michael Russell, minister for UK negotiations on Scotland’s place in Europe, tweeted, “Thank you BBC News for letting JMC members like me know that Article 50 is to be triggered next week. @GOVUK somehow forgot to inform us.”

Speaking to the press in Brussels, the Irish finance minister Michael Noonan said negotiations would not get underway for two months following the Article 50 triggering.

The Irish government then published a graphic outlining what is expected to happen next and who is involved in Article 50 negotiations.

According to the explainer, the 27 member states will meet by the end of April or early May to agree and adopt guidelines defining the framework for the negotiations. By mid May, the EU general affairs council will adopt more detailed negotiating director for the EC and authorise the opening of the negotiations, which will then start by the end of May or early June.

Keir Starmer MP, Labour’s Shadow Brexit Secretary, said, “Britain is about to embark on the most complex and important negotiations since World War II, so this a hugely significant moment for the whole country.

“Theresa May has repeatedly said that she wants to build a national consensus on Brexit, but it is increasingly clear she has failed to do so. Britain is now more divided at home and isolated abroad.

“It is also extraordinary that the prime minister has failed to provide any certainty about her plans for Brexit or to prepare for the clear dangers of not reaching a deal with the EU.

“Labour will hold the prime minister to account all the way, and argue for a Brexit deal that puts jobs, the economy and living standards first.”

Tim Farron, leader of the Liberal Democrats, said, “Theresa May is embarking on an extreme and divisive Brexit. She has rushed this through without a plan, and without a clue.

“On the day Theresa May is travelling the country claiming she wants to bring the United Kingdom together, she lets it be known she is about to unleash division and bitterness.”

“Great burden” on government departments

Also on Monday, the IfG published research warning that up to 15 new bills in addition to the Great Repeal Bill could be required to deliver Brexit.

The report said that Brexit will place a “huge burden” on Parliament and several government departments, with a white paper expected to be published as soon as before Easter.

Hannah White, IfG director of research, said, "The legislation required for Brexit will leave little parliamentary time for anything else – and making a success of it will require a large volume of bills and secondary legislation to be passed by Parliament against a hard deadline.

"It will be a challenge for both the government and Parliament to do all this while still ensuring full scrutiny and leaving room for the government’s domestic policy agenda.”