More than three months after British voters elected to extricate their economy from the European Union, Brexit still hasn’t actually happened. What’s going on?
Apparently nothing more than a careful process designed to minimize damage on both sides of the English Channel. British Prime Minister Theresa May recently announced a target of late first quarter 2017 as the time she and Parliament will finally pull the trigger and invoke Article 50 of the EU’s Lisbon Treaty.
When that happens, it will, by contract, start two years of negotiations on exactly what the economic relationship between Britain and mainland Europe will become. At the same time, however, May says she plans to introduce “Great Repeal” legislation next year that will convert all existing EU laws into U.K. legislation. Parliament will also have to repeal the European Communities Act of 1972.
But will there actually BE a Brexit? A group of over 1,000 British barristers have signed a letter pointing out that the Brexit referendum was nonbinding, and that the prime minister cannot make such a significant decision without consulting Parliament. It’s possible that until Parliament affirms the extrication from the European Union, it won’t legally take place. London’s High Court is expected to issue a ruling on Parliament’s role in Brexit on October 13, but an appeal is expected no matter what the ruling—sending the case to the U.K. Supreme Court to be heard in mid-December.
It may be helpful to remember that May herself advocated remaining in the European Union prior to assuming her current leadership position. There is speculation that her uncompromising timeline on Brexit is simply a way to reassure voters that she has heard their message. Then she can work for a so-called “soft Brexit,” where the country will control its borders via liberal work quotas, and there will be little changed in terms of trade and finance.
Meanwhile, despite the dire predictions, there has been no British recession as a result of the unexpected vote, and little has changed in regard to London’s status as Europe’s leading financial center.
About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years. Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site: MorningstarAdvisor.com.
Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association.