Brexit Update 31st May 2019

By June 10, 2019 Brexit Updates

Top 3 developments

  • Voters displayed their frustration with both Labour and Conservatives at the EU elections last week.
  • Numerous Conservative MPs enter Tory leadership race.
  • Jeremy Corbyn pivots, again, in support for a ‘confirmatory’ referendum.

UK Update

Farage Buys Everyone a Milkshake

The results of the European Parliament elections were announced on Sunday. Generally, populist and nationalist parties did well across Europe, and the UK was no different. The Brexit Party came first in the UK, winning 29 of the 70 seats with a 31.6% share of the vote. The Liberal Democrats also benefited, much like in the local elections, increasing their share of the vote to 20.3%. However, the Conservative and Labour parties were both humiliated, with just 23% of the electorate supporting them both. This was the worst performance for the Conservatives in 200 years, which seems ominous for the next general election.

These results are significant as they show how deeply divided the UK remains over Brexit. Together the Brexit Party and UKIP, who favour a hard Brexit and no-deal exit, gained 34.9% of the vote, whilst the Lib Dems, Greens and SNP, all of whom back a second referendum, gained 35.9%. This is almost an equal split and shows how difficult it will be to find an agreement that has both Parliamentary and public support.

This will definitely impact the future negotiations, once the Tories have found a new leader. The Conservatives will have to pivot to a harder Brexit strategy in order to regain support from those who have abandoned them for UKIP and the Brexit Party, although this will no doubt affect their chances in the next general election. On the other hand, Labour has shifted, confirming support for a second referendum, as an attempt to gain favour with those who now regard the Liberal Democrats as the voice of remain within the UK.

Out positioned

With twelve candidates now in the running to replace Theresa May as PM, MPs have started to roll out their policy pledges if they make it to Number 10. Interestingly, almost all of the notable policy commitments have been regarding tax cuts. Jeremy Hunt wants to cut corporation tax, Dominic Raab wants to cut income tax and Sajid Javid wants to cut stamp duty, to name a few. This has made it very clear that this campaign will be a pitch to the Conservative membership, rather than to the wider electorate. It is not surprising why candidates are doing this, as the campaign will culminate on a vote on the last two candidates by the Conservative membership, not the electorate. But all candidates should keep one eye down the road to the inevitable General Election that will happen either in 2022 or earlier to validate the victor’s leadership.

While throwing red meat to the party membership on taxes is appealing, the only policy that will really matter at the end of the day is what is the candidate’s position on Brexit? This is the one that will make or break a candidate, and you will notice that none of the candidates have advocated for a second referendum for this very reason, as it is strongly rejected by Conservatives and is therefore campaign suicide. The real clincher is which candidate is most willing to flirt with the idea of a no-deal Brexit? No-deal is an option that is popular with Conservatives (a ESRC poll said that 76% of members backed this option over remain), and it is no coincidence that Johnson, Raab, Leadsom and McVey have openly declared that they will pursue no-deal if they cannot negotiate a better agreement. Considering the EU publicly announced this week that they will not reopen the negotiations, it is worth examining what the candidates are saying they will do if they can’t secure any changes to the current deal. This is the territory where the campaign will be fought and won.

Two’s company, three’s a crowd, twelve’s a…

From an outsiders’ perspective, it can seem baffling that there are so many Conservative MPs running for the leadership, including many that you may never have heard of. It begs the question, why on earth are they running if they have literally no chance of succeeding? But contending for the leadership is a great way to increase your stock in the Party and with the party membership. MPs on the periphery of the Cabinet or those looking for a promotion view this contest as an opportunity to get a better job. Gaining some momentum in the press and securing the support of a number of MPs, then dropping out and supporting another candidate (and bringing their supportive MPs with them) is usually rewarded with a big Cabinet job.

This is almost certainly what MPs like Kit Malthouse (Housing Minister) and James Cleverley (Brexit Minister) are doing, as they have no realistic shot of becoming the PM because they lack Cabinet experience and are not well known enough amongst the membership or the general public. But if they survive the initial rounds of voting in the campaign, their support could be the vital difference to those who are seriously challenging to become one of the final two candidates. Expect their loyalty to be rewarded if they are the difference maker.

Sorry, the Brexit Vote is on Pause…Again. 

Theresa May has officially declared that there will not be a fourth vote on her Withdrawal Agreement, as her departure date is set for next Friday (7th June). It is reported that senior Cabinet Ministers urged the Prime Minister to use this limited opportunity to push through smaller concessions, such as citizens’ rights. However, Downing Street has confirmed this week that since Government was in a “different position” there are now no plans to bring the Withdrawal Agreement to the floor.

With the leadership contest beginning on 10th June, and it being unlikely that a leadership candidate will be selected long before summer recess, Parliament will not have the opportunity to vote on a Brexit deal until less than six weeks before the current deadline. This puts the new leader of the Conservative Party, whomever they may be, in an extremely difficult position if they wish to gain notable concessions to the Withdrawal Agreement, especially since the EU27 have confirmed that they will not reopen negotiations on this agreement. This limited time has significantly increased the likelihood of a no-deal Brexit, second referendum and further extension of Article 50. All of these remain valid Brexit options until a new leader of the Conservative Party is elected.

I’ll finally listen to the public, now that they no longer support us

Following Labour’s dismal performance in the EU elections, Jeremy Corbyn has confirmed his support for a “confirmatory” referendum. This referendum would allow the public to vote on the Brexit deal and several other Brexit possibilities. Although the party has not confirmed what the other options would be, it is reasonable to presume that remain would be on the ballot paper. Corbyn is also meeting with Leo Varadkar, Ireland’s Taoiseach, this week to discuss a Brexit compromise that could be added as an alternative to the current Brexit deal.

Corbyn’s shift is a significant demonstration of the party’s scramble to gain favour with the public. Notable members of the Labour Party have been campaigning for a second referendum for a long time, arguing that by not doing so Labour is alienating and ignoring those who voted Remain in the 2016 referendum. Corbyn long held the position that a call for a second referendum would alienate many traditional working class Labour supporter. However, it is clear that Labour does not hold much public support at the moment and a “confirmatory” referendum may act as a possibility to appease both side of the Labour supports.

Unfortunately for Corbyn this shift may have come too late as University College London’s constitution unit has concluded that the shortest gap between deciding on such a vote and holding it would be 22 weeks. This would include a ten-week campaign, so even if there was Government support for a referendum, meaning that it could not be done by October 31st, the current deadline date. Therefore, Corbyn’s attempt to listen to the public may have come too late to save the Labour support base, should the Brexit deadline remain the same.

Jumping on the Second Referendum Bandwagon

Nicola Sturgeon, Scotland’s First Minister, proposed plans for a second referendum on Scottish independence this week. Looking at the current candidates for the Conservative leadership contest, Sturgeon argued that the favourites “would take the Tories down a track of a hard Brexit or possibly a no-deal Brexit, and we all know the catastrophe that would be”. It is noteworthy that Sturgeon does not have Governmental support for holding such a referendum and that Willie Rennie, the Scottish Liberal Democrats leader, said “Nicola Sturgeon wants to pile the chaos of independence on top of the chaos of Brexit”. The First Minister will have to wait until a new leader is selected before she can gain permission to hold a referendum and even then it is unclear whether there is enough support for such a second independence vote in Scotland.

**** your clean campaign!

One of the more bizarre leadership stories of this week was Matt Hancock’s expletives directed at Boris Johnson hours after he had created a clean campaign pledge for the leadership contest. Clean campaign pledges are designed to avoid campaigns getting personal (a tactic which sunk Andrea Leadsom’s leadership bid in 2016 when she referred to Theresa May’s lack of children) and to prevent the eventual winner from emerging with too many battle scars to govern effectively. The thing is, if you create such a pledge, it is common practice to generally adhere to it. But the Health Secretary, positioning himself as the youthful, pro-business candidate, somewhat undermined his pledge when he referred to Boris Johnson’s historic remark of “f**k business”, with: “f**k, f**k business.”

Hancock was criticised for saying this when the ink had barely dried on his own clean campaign pledge. But it is unlikely to damage his campaign as using such language is hardly offensive enough to dampen his appeal to his key demographic: the young and business enthusiasts. This story however is hugely important because the idea of a clean campaign is actually a very clever tactic to stop the most electrifying (and therefore most dangerous) competitor in this campaign: Boris Johnson. Following the announcement of this clean campaign pledge, a Johnson supporter Nadine Dorries MP denounced it as a “dirty trick”. In the well-oiled machines of modern campaigns, there is no way a comment like that would ever emerge from a Boris supporter without it being approved by the Johnson camp, so his team are clearly annoyed by this clean campaign pledge.

The reason for this, is that getting personal and saying offensive things usually works. Although the UK is not the US, Donald Trump did outline a new blueprint for campaigning, which in essence is drowning out all other candidates by dominating the headlines through saying controversial things. Which candidate is by far the most famous candidate, and the most likely to say things that will grab headlines? Hancock may well have removed Johnson’s greatest asset, and it will be interesting to see how this affects Johnson’s campaign in the coming weeks.

EU Update

Attempting to clear up the mess

EU27 leaders met for a Summit in Brussels on Monday after the European Parliament elections. The discussion was officially focused on how the leaders envisioned fulfilling their obligations under the EU treaties. Tusk stated that whilst Theresa May updated him on her departure date, Brexit was not discussed at the Summit. However, Juncker announced that he had been “crystal clear” that there would be no renegotiation of the deal agreement already rejected three times by the Commons, limiting the options for the next Conservative leader before the departure date. It is clear that the EU27 have lost patience with the UK, especially after the election results.

Additionally, EU leaders are now preoccupied with the race for the next President of the European Commission. Top contenders include Manfred Weber, Frans Timmermans, Michel Barnier and Margrethe Vestager. Merkel and Macron continue to clash at this summit over Merkel’s support for Manfred Weber as the next President. Whilst Merkel did not back down on her support for Weber, she did acknowledge that there would be difficult talks in the summer as the EPP (Weber’s party) does not have a majority in the European Parliament. The leaders themselves are involved in a leadership contest of their own, to ensure that an experienced President is selected to support the EU’s agenda, which is of course subjective to each member state. It is likely that the EU27 will not engage in the Brexit discussions until a new Conservative party leader is confirmed and the next European Commission President is selected.

Upcoming Key Dates

  • 7th June: Theresa May’s departure date
  • 10th June: Leadership battle begins
  • 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.