The past seven days have been momentous in UK politics, with the risk of a no deal exit on 31 October reaching a peak, then dramatically reducing with the passage of the Benn-Burt Bill (or as it is formally known, the European Union (Withdrawal) (No. 6) ACT), resulting in law requiring the Prime Minister to ask the EU for another extension if specific criteria are met. So, now that Parliament has been prorogued, what can business expect over the next fifty days?
Boris Johnson has been Prime Minister for just over four weeks and the prospects of no deal are climbing, particularly as there are currently no ongoing negotiations between the UK and the EU. There are fewer parliamentary mechanisms that could block a no deal outcome now compared to in the run up to 29 March; opposition parties and some “rebel” Conservative MPs are exploring any methods possible, including a vote of no confidence with a caretaker government.
Last week saw the widely expected election of Boris Johnson as new Conservative Party Leader and hence as the new UK Prime Minister. Prior to his election, Mr Johnson had pledged to take the UK out of the EU on 31 October, “do or die”, with or without a deal. Since becoming Prime Minister, Mr Johnson has stated that the Withdrawal Agreement is ‘dead’ and that he will not meet with the EU unless it can be re-opened.
Reporting on Brexit Risk
The Conservative Party leadership contest continues, with the two candidates – Boris Johnson and Jeremy Hunt – attending hustings across the country for the next week. Voting has opened among the Party’s members, and the new Prime Minister will be announced on 23 July. Both candidates have differing Brexit plans, and business will be playing close attention to the pledges and commitments made during the process. Both have committed to leaving the EU by 31 October 2019.
A UK-US Trade Deal?
We continue to see the Conservative leadership contenders whittled down further, with the various debates and media briefings substantially covering the Brexit strategy of each. At the time of writing, Dominic Raab is the most recent runner to be eliminated and five candidates remain. We’ll know the final two by the end of Thursday, 20 June, after which the decision as to who will be the UK’s next Prime Minister will be handed over to the grassroots members of the Conservative Party.
With Easter recess over, cross-party negotiations on Brexit have resumed in a further bid to break the deadlock over the Prime Minister’s deal with Brussels, but there’s very little ‘new’ news for business to act upon. Following the latest extension to the Article 50 deadline, the UK is now scheduled to leave the EU by 31 October with or without a deal.
In our last blog, I wrote about business leaders waiting for certainty on the Brexit process – well certainty is still elusive.
On 10 April the EU27 agreed to grant a further extension to the Article 50 deadline - to 31 October. But, the UK can withdraw earlier once the Withdrawal Agreement is ratified by both the UK and EU.
The extension is contingent on the UK taking part in the European Parliamentary elections starting 23 May; otherwise the extension ends on 31 May. The Prime Minister is hoping to avoid the UK having to take part in the elections, so talks continue between the Government and the opposition, in the hope of gaining cross-party support for the Withdrawal Agreement.