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Article 50: What Happens Now – and How Will It Affect the UK Economy?

06 February 2017

by Gemma Foley

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With the recent news that Article 50 could be invoked as soon as 31 March, the country once again finds itself in a state of political unease. One of the biggest questions on our lips is how our trade terms will fare in EU-UK negotiations. There is also widespread discussion about immigration, and what Brexit means for EU nationals in the UK. This time round, the British public won’t have a say; any decision on the withdrawal agreement is decided by the incumbent EU member states.    

Legislation – European Union (Notification of Withdrawal) Bill

The second reading of the European Union (Notification of Withdrawal) bill took place on 1 February, and resulted in an overwhelming 498-114 pro-Article 50 vote. This indicates that the decision to leave won’t be blocked at a parliamentary level, though this remains to be confirmed. More will be revealed as the final vote into the House of Lords takes place on 8 February.

Commerce – still a champion of free trade?

A white paper published on 2 February stated that the UK will negotiate the ‘most frictionless trade possible in goods and services’. Concern regarding this varies from market to market, with the tech industry fearing damage to growth and talent, the insurance sector projecting major regulatory change, and e-commerce businesses losing overseas sales due to cross-border difficulties.

Immigration – uncertainties not fully addressed

Comment on the future for EU citizens living and working in the UK has remained vague, perhaps deliberately, while the government attends to the broader implications of Brexit. May’s rhetoric speaks of understanding European business priorities in this new commercial landscape. Movement is also being considered ‘very carefully’ with regard to ‘impact on the economy and labour market’.

Thus far, Article 50 comment shows a lack of clarity, though this isn’t surprising given the public’s divided opinion on how to proceed. Official statements largely repurpose May’s 17 January speech, and this looks to be the standpoint until at least 8 February, when parliament reconvenes.

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