Brexit Briefing - July 2019

10 Downing Street

Author Sgt Tom Robinson RLC/MOD
Licence Open Government Licence  v. 1.0
Source Wikipedia 10 Downing Street

Jane Lambert

On 24 July 2019 HMQ invited the Rt Hon Boris Johnson MP to form a government. Immediately, he installed a new team of ministers and advisers with the mission of withdrawing the United Kingdom from the European Union by 23:00 on 31 Oct 2019. Ostensibly the Johnson administration's objective is to negotiate a new withdrawal agreement within the meaning of art 50 (2) of the Treaty on European Union or renegotiate the existing draft but its preconditions for resuming talks are well beyond the negotiating guidelines of the European Council of 29 April and 15 Dec 2017 and 23 March 2018. According to Daniel Boffey and Rowena Mason, the Commission has advised the governments of the 27 member states that "Boris Johnson has no intention of renegotiating Brexit deal" (5 Aug 2019 The Guardian).

Now announcements of that kind are not always to be taken at face value. It is possible for one side or the other to make sufficient concessions to enable a deal to be done.  Parliament may pass a motion of no confidence or even a statute requiring the revocation of the notice of intention to leave the EU in the event of no-deal,. But these are unlikely.  They will require an act of political courage on the part of a sufficient number of remain minded Tory MPs that few have exhibited to date. There will be enormous demonstrations by brexit supporters and possibly even civil unrest.  The recent plunge in the value of the pound suggests that markets anticipate a disorderly brexit, that is to say, leaving without a withdrawal agreement.

And then what?  In Preparing Brexit: No Deal, the Institute for Government warns that:

• It will be much harder and more complex to strike a deal with the EU;
• No-deal means losing deals with many other non-EU countries;
• A showdown in Parliament cannot be avoided:
• Brexit will dominate Whitehall;
• The government will have to support struggling and failing businesses: and
• The Union will come under unprecedented pressure.

Will we gain in a trade deal with the USA what we lose from erecting barriers between ourselves and our nearest and largest market?  Possibly, but unlikely (see What Sort of Trade Deal (if any) could the UK negotiate with the USA? 8 June 2018).  This morning we were flattered by Senator Tom Cotton and 44 of his colleagues in Cotton, Colleagues Pen Letter Pledging to Back Britain After Brexit 3 Aug 2019. But we were exposed to some healthy realism by former Treasury Secretary Larry Summers who made the point that we have very little leverage in any negotiations with the Trump administration

What can businesses and individuals do to mitigate the consequences of a hard brexit? Obviously, take note of the avalanche of guidance notes and emails that are likely from the government in the next few weeks but there are also a lot of useful suggestions in the CBI's What comes next? The business analysis of no deal preparations (see Practical advice on preparations for No deal from the CBI and IfG 1 Aug 2019).

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