Brexit Update 17th May 2019

By May 30, 2019Brexit Updates

Top 3 developments

  • The Prime Minister announced that the fourth vote on the Withdrawal Agreement will take place on the week commencing 3rd June.
  • The Prime Minister has met with 1922 Committee and stated that she will set her departure date after the next Brexit vote in June.
  • Labour Leader, Jeremy Corbyn, has announced that cross-party talks have ‘gone as far as they can’.

UK Update

Fourth Time is the Charm…?

The Prime Minister, Theresa May, has announced that she will hold a fourth vote on her Withdrawal Agreement, without Labour’s support, most likely taking place on the week commencing June 3. This is already a busy week for the Prime Minister, with President Trump’s state visit taking place June 3rd-5th and D-Day commemorations taking place in Normandy on the 6th and Parliament not sitting on the Friday. A Downing Street spokesperson has defended the Prime Minister’s decision to hold this vote at such a busy time, stating that it was “imperative…if the UK is to leave the EU before the summer parliamentary recess”. However, subject to the ruling by the Speaker of the House, John Bercow, May must make substantial changes to the Withdrawal Agreement to allow for it to be brought in front of Parliament for the fourth time.

Jeremy Corbyn has announced the end of cross-party talks this morning, stating that they have ‘gone as far as they can’. This means that the Prime Minister will no longer be able to pull a rabbit out of her hat, providing a substantial change to the Withdrawal Agreement that would gain the approval of both parties. The talks stalled over disagreements over a customs union, with Conservative backbench protests over adoption of such a policy and Labour backbench protests over the lack of inclusion of a second referendum.

As an alternative option, the Government has not yet ruled out a series of definitive votes to be put forward to Parliament in order to finalise a Brexit strategy that would gain a Parliamentary majority. However, two rounds of indicative votes have already been held, due to the Boles amendment earlier this year. Neither series of votes were decisive, as Parliament rejected every possible Brexit strategy. Thus, there is little optimism that Parliament will point to a clear path for Government to pursue, ahead of the new ‘Brexit D-Day’: 31st October.

Shut the Door on Your Way Out

The PM has confirmed that she will announce a departure date next month, regardless of whether she can pass a Brexit deal through the Commons. Although this has seemed inevitable for a while, it took a blunt threat from the 1922 Committee to eventually force her hand on this. Their threat was that if she did not agree to name a date, they would change Party rules to bring forward a no-confidence motion in her leadership to June.

The PM has agreed to meet the 1922 Committee on the week beginning the 3rd June to outline a clear timetable for her departure. This is the same week in which her Brexit deal is expected to come back to the House for a fourth time, and the departure date is expected to be heavily influenced by this result. If the deal (somehow) passes, the PM would most likely be given a departure date soon after Party Conference, as this would give a few months for a full leadership contest and would allow her to give an outgoing address to the Party.

If the deal does not pass however, all bets are off as to when she will leave, but it will most likely be extremely soon after the vote. There will need to be time for a full leadership contest, and then for the new PM to negotiate some sort of agreement with the EU and Parliament, considering the current Article 50 deadline is 31st October. A full leadership election could take up to twelve weeks, as there are expected to be several candidates that are whittled down one by one until the final two are voted upon by the Conservative membership. But hypothetically, if the PM was forced out of office the week after a failed vote, say 10th June for example, and a full twelve-week election period commenced, the new PM would have just over eight weeks to unite the Party and country, pick a new Cabinet, renegotiate the withdrawal agreement, sign it off with Brussels and then pass it through Parliament. Hey, no one said this job was easy!

‘What Do We Want? A Second Referendum! When Do We Want It? Now!

Earlier this week, both Tom Watson and Sir Kier Starmer have criticised the Labour Leader, Jeremy Corbyn, for not including a second referendum as a necessary requirement of a cross-party agreement, arguing that Labour was the party of “remain and reform” and therefore should include a so-called People’s Vote as an option. This criticism came as Conservative Ministers attempted to put pressure on Labour to back the current deal in return for concessions on customs arrangements, workers’ rights and environmental protections.

Both Watson and Starmer argued that it was unfathomable for Labour to not advocate a second referendum, highlighting that the party’s manifesto states that “if we can’t get agreement along the lines of our alternative plan, or a general election, Labour backs the option of a public vote.” Now that it is confirmed that the cross-party talks have hit a dead-end and that Labour’s plan will not be put forward as a Brexit strategy, many argue that this has created both the opportunity and need for a second referendum. Shadow Brexit Secretary, Sir Kier Starmer, argued that the up to 150 of the party’s 229 MPs would not vote for a Brexit deal that did not include a second referendum. This was clearly an attempt to pressure Corbyn into agreeing to the inclusion of a second vote, in the hope that it would allow a deal to be supported by the Labour Party.

Jeremy Corbyn, however, refused to concede to demands from his frontbench to back a second referendum. There have been fears amongst the Labour leadership that support for a second referendum would alienate many Labour supporters from the party’s traditional heartlands – a section of support which is being targeted by the Brexit Party. Yet, the majority of Labour’s newer supporters in metropolitan centres are remain voters and a failure to support a second referendum could alienate these voters.

Never Quit(o) if you stumble

Although the Department for International Trade’s reason for existence has been questioned following the gradual pivot towards a customs union deal (which would forfeit the UK’s ability to have an independent trading policy), it was announced on Wednesday that the UK has signed a trade agreement with Ecuador, Colombia and Peru. The UK-Andean Countries Trade Agreement will help protect a trade flow of £2.1 billion by preventing any additional barriers or tariffs arising in the event of a no-deal Brexit. The Agreement was signed in Quito, Ecuador by the Trade Ministers of the three South-American countries.

Although it is easy to be cynical about this Agreement – as these countries are hardly economic juggernauts and would obviously not offset the deficit of leaving the dozens of other trade deals that we currently benefit from by being in the EU – there are lots of opportunities for UK businesses to export services into these emerging markets. So, this is a positive step taken by the Government to proactively ensure continuity for businesses in the event of no-deal. But equally this should not be used as a singular example about how easy it is to replicate the current trading relationships we have with all of our other trading partners, and the Government still has a long way to go to counteract the potential effects a no-deal Brexit would have on the UK’s economy.

The Blair Which (Party should you vote for) Project

Former Prime Minister Tony Blair has said that Labour’s Brexit policy has harmed its chances for success in the European elections. During an event on Tuesday, Blair said that “trying to keep both sides happy is not possible” and predicted that the election results would not be good news for Labour. He also confirmed that he would be voting for Labour, but urged voters to vote for one of the other anti-Brexit parties if they could not bring themselves to vote for Labour.

This really is quite startling. When have you ever heard a former Party Leader (not to mention a former Prime Minister) advocating people to vote for a Party other than their own? Perhaps this reveals just how committed Blair is to stopping Brexit, but it also confirms his belief that Labour are certainly not the party championing the anti-Brexit cause. This much is already clear, as Labour’s policy still supports a Brexit deal, provided it is the ‘right’ deal. But considering a large proportion of Labour’s new wing of supporters are passionately pro-European, it is notable that the only Labour leader who has won a General Election since 1974 has admitted that Labour’s Brexit policy is insufficient to anti-Brexiteers.

Let’s Keep It Civil

The current Parliament now has the dubious honour of being the longest Parliamentary session since the English Civil War. This session of Parliament has now sat for 302 days (and counting), and there is no end in sight as the PM is highly unlikely to prorogue Parliament any time soon. As we have previously highlighted, a new session of Parliament requires a vote on the Queen’s Speech, which is essentially a confidence motion on the policy programme for the next session. May risks losing such a vote, as she has lost the support of Tory Brexiteers and a new session would require a new confidence and supply arrangement with the DUP, which is also unlikely. This current session of Parliament is therefore unlikely to end until a Brexit deal has passed and a new Conservative deal is installed, who would be able to outline a refreshed set of policies for the Tories to unite around. Considering the longest ever Parliamentary session was 3,322 days, fingers crossed that this Government doesn’t break that record trying to get a Brexit deal over the line…

EU Update

Olly’s at the wheel

Fresh speculation emerged about the progress of the cross-party talks this week as Brexit Negotiator Olly Robbins was seen in Brussels. It is suspected that he was there to talk to senior EU negotiators to get some feelers about which policies would or wouldn’t float with the EU. This does not confirm that a deal is ready to be negotiated with the EU, and there is every chance that this exercise is a glorified publicity stunt to keep up the appearance that these cross-party talks are going somewhere and that a deal is more than a pipedream.

But there have been reports that Labour were sobered by the revelations that many of the limitations in the withdrawal agreement were put there by the EU, and were not due to a lack of ambition from the Government’s side. Further clarity from Brussels about the parameters of what a deal could look like would therefore be useful ammunition for the Government in these cross-party talks. As Olly Robbins is a civil servant, he can conduct his business a lot more privately than a publicly elected official (unless he is overheard in a bar…), so it is likely that the details of his discussions will be kept under wraps. But it is significant regardless that Robbins is in Brussels, and it does suggest that the cross-party talks have not yet stagnated.

‘Can (E)U Please Stop Fighting’

The UK has been so distracted with its own deadlock that it has failed to exploit the growing disagreement between France and Germany over the Brexit negotiations for its own favour. Initially, creating a split between the EU27 was one of UK Government’s main focuses in order to try and gain a more favourable deal. The threat of a no-deal Brexit was supposed to sharpen those divisions by forcing continental governments to put their national commercial interests first, giving London leverage.

Friction between France and Germany became apparent after the UK’s request for a formal extension of Article 50. At the special EU Summit in Brussels, the French leader insisted any extension to the negotiating period be brief whereas the German chancellor advocated Britain being granted as long an extension as possible. Reports suggest that Germany secretly hope, along with Donald Tusk, that the UK will change their position on Brexit and stay in the EU. Whereas France appear to be adamant that the UK is leaving the EU and want this to happen as soon as possible, allowing the EU to focus on their own agenda and no longer be hijacked by Brexit.

The UK, however, has failed to take advantage of this disagreement since the extension was granted by EU27 in April.  Focus has very much been on the UK and how it will move past the current deadlock over the Withdrawal Agreement. Time has very much been wasted, as Donald Tusk asked the UK not to do, with little progress being made since the extension was granted. Reports have suggested that had the UK utilised this disagreement between France and Germany, rather than focusing inward, they may have been able to secure greater concessions. As this was not the case, the two countries are very much of the agreement that Brexit is out of their hands and in the control of the UK Parliament; they are not ready to offer big concessions to help the British come to a decision.

Upcoming Key Dates

  • 22nd May: Deadline to pass a Withdrawal Agreement without participating in the EU elections.
  • 23rd May: European Parliamentary elections.
  • W/c 3rd June: Fourth Vote on the Withdrawal Agreement.
  • 23rd June: Three year anniversary of Referendum.
  • 30th June: Brexit review if the UK is still a member of the EU.
  • 31st October: Current Brexit Deadline.