All Change and an Unmanaged Brexit
July 30, 2019

The Conservative Party leadership election came to a conclusion at mid-day on Tuesday, 23 July when it was announced that Boris Johnson had won the support of two-thirds of Conservative Party members. The next day, Theresa May attended her last Prime Minister Questions and later that afternoon the Queen invited Mr Johnson to form a government. A complete overhaul of the UK Cabinet then ensued (for a full list of ministers now in post, see here). While it is the youngest and most diverse Cabinet in British history, it is also one that has one objective in mind – the UK’s exit from the European Union.

The clock is now ticking towards 31 October 2019, a date that the now Prime Minister has set in stone as the date the UK will leave whether there is a deal in place or not. Given the comments made by the EU, it is unlikely that any new deal will be agreed meaning that a no-deal exit has become the most probable outcome. However, there may be more machinations to come as certain members of the UK Parliament are adamant that a no deal scenario will not be acceptable to Parliament. To complicate matters further, the Conservative government expects to lose a seat this week and there may be another by-election in the near future which could result in a majority of just one, which will be very precarious to manage.

Prime Minster Johnson and his key ministers, including new Chancellor Sajid Javid, have been repeating every day that the UK is now planning on a no-deal exit. Whether this is mere posturing is by-the-by given the EU’s unwillingness to renegotiate.

In the event of a no-deal (or even an amended deal that dispenses with the Irish backstop), the Johnson government is likely to rely heavily on the report published by Prosperity UK’s Alternative Arrangements Commission in which it makes various recommendations relating to the Irish Border to avoid physical infrastructure via “consideration of comprehensive customs cooperation arrangements, facilitative arrangements and technologies”.  (You can see the full report here.)   As the prospect of no-deal increases, the UK’s Confederation of British Industry also published on Monday 200 recommendations for no deal preparations for the UK, the EU and UK and UK companies in the belief that no-one is ready for a no-deal outcome (See here).

In the event that Boris Johnson fails to deliver Brexit, a general election may become imminent. The Prime Minister’s team appear to believe that they can harness the leave sentiment in the UK and blame Parliament, the EU and opposition parties for any failure to deliver. If they can succeed in this, they just might be able to secure the support of many leave voters while the remain camp will be split. This is a logical path to a majority, but events in our experience are often not logical.

The wait continues…

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