Since our last post, a great deal of progress has been made on Brexit.  Only just over a month ago, it was far from clear whether discussions would expand to discuss the future relationship between the UK and the EU.  Progress finally came on Friday, 15 December when EU leaders in Brussels formally agreed that “sufficient progress” had been reached in the Brexit talks and signed off on the start of transition discussions.   The European Commission’s recommendation to the European Council to begin discussions on the next phase of the withdrawal of the United Kingdom from the European Union can be found here.  One of the core EU demands was to settle the financial ‘divorce’ bill, which has now been proposed to be £39 billon.

Initially it was hoped that discussions would move immediately onto what happens post Brexit, but a third phase has now been introduced into the Brexit withdrawal process.  The first phase, achieving sufficient progress, has been reached and the new second phase is focussed on agreeing a transitional period, which the European Commission has proposed must end no later than 31 December 2020.  During this period, the Commission proposes that the UK will be subject to all EU obligations and regulations, including payment obligations, but the UK will cease to have any say on EU matters from 29 March 2019 – a position that is unlikely to be acceptable to the UK government.  Brexit negotiations are now centred on the terms of a transitional period with progress on this only expected in March.  If an agreement is reached on the transitional period, then the discussions on the withdrawal of the United Kingdom will finally move to considering the future relationship between the UK and the EU.

Separately, in the UK the Act of Parliament to bring about the UK’s withdrawal has now cleared the House of Commons and is now with the House of Lords.    The European Union (Withdrawal) Bill passed its third reading largely unamended on 17 January 2018.  It had its first reading in the House of Lords on 18 January and is scheduled to have its second reading on 30 January 2018.  Details of the bill’s progress can be found here.  It remains to be seen what, if any, amendments will be passed by the Lords before the bill returns to the Commons.