The Brexit date of 29 March passed and a two-week extension was given but failure to make any further progress resulted in EU leaders granting a further extension until 31 October, prompting the UK’s participation in European Parliament elections.
This latest delay in Brexit was an attempt to give the Government sufficient time to break the deadlock between MPs and for them to agree on a way forward. However, the lack of a parliamentary majority for not just the negotiated deal but also for any proposed alternatives has meant that Theresa May will once again face an uphill struggle. After a series of indicative votes by MPs, it is clear that concessions will be needed on all sides of the House of Commons, not least of all when it comes to the question of a customs union.
How will this impact businesses?
In extending the deadline for Brexit, businesses continue to endure a prolonged period of uncertainty. As a result, caution will remain at the forefront of decision-making processes, not least of all with real estate plans.
Firms who were readied with a Brexit strategy will see those plans realigned to the new dates. Businesses who were not quite as prepared for the 29 March will be able to use the extra time to ensure more thought and planning is given. Yet the greatest impact will be on those businesses who were required to stockpile or make significant investment in the months prior to the initial Brexit date. The cost implications for those companies could be big, especially those who deal in perishable goods. Whilst firms with other products may incur additional warehousing and logistics costs and/or have limited capital to work with ahead of a new Brexit deadline. This all suggests there is time over the coming months, to ensure that plans are agile enough to cope with any shock emanating from Brexit.
Whilst the business landscape will look to safeguard itself from the decisions being made, the political landscape is far from certain. We have already seen two new political parties formed, party allegiances being stretched and parliamentary procedures being tested to the hilt. The Prime Minister by her own admission is on her way out of No.10 and calls for a general election could grow stronger in the event of no-deal.
As we stated in our The Occupier: 2019 Predictions report earlier in the year, businesses who need to make real estate decisions over the next 12-18 months would be wise to seek consultation with advisers as not to be at a disadvantage during these continuing times of uncertainty.