Q&A: What do you really need to know about Brexit?

Jackie Newstead, global head of real estate, Hogan Lovells So much has been written on this subject it would be impossible to read everything. But a lot of what is out there is speculation or is slanted to the writer’s particular point of view. We also don’t know what Brexit is finally going to look like. Will it be “hard”, “soft” or some sort of soggy in between? You will each have your own views as to what the final deal should be – or indeed as to whether Brexit should happen at all. Speculation aside, here is a crib sheet of the nine things you really do need to know. 1. The government triggered Article 50 on 29 March 2017, which means that from 1 April 2019, the UK will no longer be part of the European Union. 2. The first phase of the negotiations between the European Commission and the UK government, which covered what has been called the “divorce bill”, concluded in late 2017 and the European Commission has decided that sufficient progress had been made for the parties to move on to the next phase. 3. That next phase is the discussion around transitional arrangements. The intention of the transitional arrangements is to ensure that even though the UK is no longer part of the EU, the move from “in” to “out” is softened by continuing some of the current arrangements for a period of perhaps two years. It is expected that the discussions as to transition will conclude sometime in March 2018, with the talks then moving on to the longer-term detail of the relationship after the end of that transitional period. 4. Transitional arrangements can be laid down only in the Withdrawal Agreement, so it is unlikely that any such arrangements will come into legal effect before the rest of the agreement. 5. Over the coming months, it is expected that the EU and the UK will begin to firm up the legal text of the Withdrawal Agreement, with a view to finalising the detail of it by October. That agreement will need to be ratified by the EU and be transposed into UK law via an act of parliament. 6. The legislation to give effect to this is the Withdrawal Bill. This has been going through the parliamentary process and is currently at the committee stage in the House of Lords. A parliamentary vote determined that whatever the final deal that the government agrees with the European Commission may be, it will need to go before parliament to be ratified as part of the process. This is expected to take place towards the end of 2018. 7. UK land law itself does not have to change. It falls outside the ambit of the Treaty of Rome and the way investors hold property will continue as it is currently. 8. Many other laws affecting businesses in the UK do derive from the European Union or are implementations of European Union law. It is proposed that this be dealt with by the repeal of the relevant legislation and its substitution with equivalent national legislation through what has been termed the Great Repeal Bill. 9. In the meantime, the uncertainty of where this will all end up is causing corporate occupiers to make contingency plans – and in some cases they are already committing to moving parts of their operations out of London and into other European cities, such as Dublin, Paris, Frankfurt and Amsterdam. The full extent of those moves is not yet known. Financial institutions, in particular, are concerned about the regulatory environment and the City has proposed a system based on regulatory alignment. Click here to read all of EG’s global content.