Following a series of Cabinet resignations over the past week, there are calls for another election from some quarters.
This is all too familiar territory for the UK. In the past four years, the country has endured two referendums and two elections, so it is no stranger to the polls.
However, the impact of ongoing uncertainty – and another visit to the booth – on the economy and business communities cannot be underestimated.
Since the EU referendum, we have seen businesses relocate operations to member states to retain a foothold within the EU, firms postpone investment and capital expenditure, and SMEs holding-off on recruiting staff until the details of the much discussed deal are announced. According to our SME Confidence Tracker, a third of SMEs with EU suppliers would not be able to operate without imports from the bloc. But it doesn’t necessarily follow that SMEs have been planning for the various outcomes of the UK’s withdrawal from the EU.
In our recent study with the British Chambers of Commerce, we found that almost two-thirds of SMEs had not yet conducted a risk assessment for Brexit. For many businesses, planning for Brexit has always been a near impossible task. Without further detail, business owners could spend every waking minute of the day scenario planning, only for the situation to change based upon speculation or public comment.
Last week some detail emerged in the form of the Withdrawal Agreement.
The Agreement is a 585-page document that will form the legal basis for Brexit. The draft covers a number of different areas, including the UK’s £39bn divorce settlement and details on the safeguarding of rights of UK citizens living in the UK, and EU citizens living in the UK, until the end of the transition period.
But crucially, the agreement includes a backstop clause, which states that the UK will continue to adhere to EU rules and regulations – to avoid the need for a hard border in Ireland – until a longer-term solution is found.
While the agreement secured the backing of the Cabinet (notwithstanding two resignations), the next step is Parliamentary backing. It seems likely that this will be tested in December.
It’s less likely that it will receive the backing of half of the 640 MPs.
So what then?
If Parliament votes against the deal, it will have 21 days to put forward an alternative proposal. If Parliament backs the deal, it will be over to the other 27 EU member states to agree.
Whatever the case, Theresa May has a difficult week ahead.
Meanwhile, the UK’s 5.7 million SMEs have further weeks of chronic uncertainty to endure. But then again, this is a state they are familiar with as uncertainty has become the new normal.