Following the vote in parliament on 29 January instructing Theresa May to return to Brussels to try to renegotiate the Irish backstop, levels of uncertainly around Brexit are still significant, and a no-deal exit from the EU looks more likely.

Throughout, there has appeared to be a parliamentary majority against no-deal, but no majority for an alternative. This was again apparent on 29 January, when MPs voted against amendments that would have given parliament more power to take control of the Brexit process. The default position dictated by Article 50 is that we leave without a deal on 29 March unless parliament can agree on an alternative. So, at present, the two most likely options seem to be an exit under Theresa May’s deal, or a no-deal exit.

This could have wide-ranging consequences for your organisation, and you should be contingency planning. There is a great deal of uncertainty surrounding exactly what a no-deal Brexit would look like. However, some things we do know.

EU workforce

Workforce issues are likely to be one of the biggest impacts of a no-deal Brexit if you employ nationals from the European Economic Area (EEA). In December 2018, the government published its Immigration White Paper, which laid out plans for a move from free movement to a skills-based immigration system by autumn 2020.

In the event of a no-deal Brexit, EEA nationals already in the UK will be able to apply for settled status. (read the latest guidance at gov.uk.) It is, however, unclear whether free movement will continue for EU nationals arriving post-Brexit.

Clearly the uncertainty these staff members will feel will be intense and this will potentially be a difficult time for some people. You may want to consider providing reassurances in terms of covering financial costs of affected staff members related to Brexit, as Locality has done with its own staff members, whilst also making clear that staff are welcome and part of your team. You may wish to consider the impact of losing key staff if they do decide to leave the UK.

In the medium-term, whenever the new immigration system comes into force, there looks set to be a reduction of ‘low-skilled’ workers from the EEA. A £30,000 annual earnings threshold has been proposed as a proxy for ‘skilled’ labour. In the white paper, the government recognised the impact this change would have on certain sectors like construction and social care and proposed the following:

“We propose, as a transitional measure, also to institute a time-limited route for temporary short-term workers. This route will allow people to come for a maximum of 12 months, with a cooling-off period of a further 12 months.”

It is unclear whether, after a no-deal Brexit, this would come into force immediately or if there would be a transition period to arrive at this new system.

Economic shock

It is extremely likely that a no-deal Brexit will result in an economic shock, that will hit the worst-off the hardest*. In such a climate, demand for services provided by community organisations will continue to be high. NCVO’s Road Ahead report provides more detail on the likely operating environment for the voluntary and community sector.

Cliff-edges

Domestically, all the EU’s rules will be rolled-over. There won’t be an immediate cliff-edge. This was dictated by the 2018 European Union Withdrawal Act, which will automatically transpose EU law into UK law.

However, where there will be a ‘cliff-edge’ is for areas which are governed by common regulatory systems. For example, trade, medicine and travel. We would revert to “Word Trade Organisation” rules on trade and will be considered third-country nationals under the Schengen Border Code.

The UK is currently part of the EU medicines regulatory network. In the event of a no-deal Brexit, we would drop out of the network and have to make our own arrangements.

All these shifts would likely have far-reaching implications. We advise Locality members to consider your activities and whether there may be an impact based on the Government’s fact sheets.

Overseas travel disruption

As well as potential travel delays and disruption on and around 29 March, it is worth considering the implications of being considered third-country nationals under the Schengen Border Code. According to the Code, third country passports must:

  • have been issued within the last 10 years on the date of arrival in a Schengen country, and
  • have at least 3 months’ validity remaining on the date of intended departure from the last country visited in the Schengen area.

As third country nationals can remain in the Schengen area for 90 days (approximately 3 months), the actual check carried out could be that the passport has at least 6 months validity remaining on the date of arrival. If you’re planning travel after 29 March 2019 and your passport will not meet these validity rules, consider renewing your passport soon to avoid any delay.

EU funding

EU funding – such as the European Social Fund – would no longer be accessible to UK organisations. However, this funding has been guaranteed by the UK government until the end of 2020. After that there hasn’t been any clear direction on how or if the government will replace the funding currently provided by Europe.

That is why we’re stepping up our public campaigning on how the UK Shared Prosperity Fund – the successor fund to EU structural funds proposed by government – should be designed to benefit communities.

Regulatory change incoming

All the above points to the fact that there will be some big changes to the regulatory and economic structures affecting community organisations and their work. What exactly this will look like is still unclear. We’ll seek to unpick this further as the situation develops.

Get in touch

If you’re a Locality member and you have any questions on how Brexit may impact your organisation, email policy@locality.org.uk

Useful links

Government guidance on a no-deal Brexit

NCVO’s research and insight on Brexit

NCVO: useful Brexit-related resources

 

*UK in a Changing Europe research points to the impact a no-deal Brexit would have on poorer regions and households. It would have a disproportionately negative effect when compared to the impact on economically better-off places and people.