The Waiting is the Hardest Part
June 17, 2019

We have waited some time to post again on Brexit matters in the hope that things would become clearer.  Certainly a lot has occurred since our last post: there were local elections in most of England and Northern Ireland on 2 May followed by UK wide elections for the European Parliament on 23 May and a UK Parliament by-election on 6 June.  However, the Brexit process remains as uncertain as ever.

During that same period, Prime Minister Theresa May attempted what she referred to as a ‘new bold offer’ to break the impasse in Parliament on her EU Withdrawal Agreement.  This turned out to be a bridge too far as it quickly became apparent that this would fail and, on 24 May, Theresa May announced that she would formally resign on 7 June triggering a leadership contest within the Conservative Party to choose her successor as party leader and as Prime Minister.

Initially there were some 14 candidates to succeed May, which has now been reduced to six following a first ballot last week on 13 June.  Those six will face a second ballot on 18 June with only those with more than 32 votes going on to the next round on 19 June (and the second debate on Tuesday evening hosted by the BBC).  (There will be a third round on 20 June.)  The front runner to succeed May is former London mayor and former Foreign Secretary Boris Johnson and we expect Johnson and an another (most likely as at today to be current Foreign Secretary Jeremy Hunt) to face the 160,000 ‘selectorate’ of current members of the Conservative Party with a final result to be announced on 22 July.

Whomever succeeds May will have to deal with the very weak position the Conservative Party finds itself in having had its worst local election result in 24 years, losing approximately 2,000 councillors, and falling to an 8.8% share of the vote in the European Parliamentary elections.  Things were not much better in the UK Parliamentary by-election for Peterborough on 6 June where the Conservatives feel to 21.4% of the vote in a seat that was Conservative as recently as 2017 (however the new Brexit Party won 28.9% of the vote in that election, which shows how much damage Brexit is having on the governing party in the UK).

As for Brexit, leaving with a deal, leaving with no-deal or no Brexit are all still very much possible outcomes.  Our view is that the probability of no Brexit has diminished and that a no deal exit has increased again, particularly in the light of a defeat of a proposal in the House of Commons to take control of Parliament’s timetable and block a no-deal Brexit, which was defeated by 309 votes to 298 on 12 June.

All eyes are now on the Conservative leadership selection to see what that means for the 31 October deadline for the UK to leave the EU.

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