Increasing probability of continued EU membership to end of 2019 means business can factor this into medium-term planning

Commerce should now be re-adjusting the probabilities for key scenarios in their strategy and medium-term business planning and budgeting.  We will increasingly focus on planning forwards.  This post sets out the thinking behind the call to pick up the momentum on strategy planning – and some of the process and timing of events on the political front to avoid them causing distraction or an excuse for continuing to ‘wait and see what transpires’ before acting.  

It is ‘highly probable’ that the UK will take part in the European Parliament elections on 23 May.  It looks ‘increasingly likely’ that the UK will be a full member of the European Union until at least the end of October 2019 – and possibly to the end of 2020.

There are only two options that could avoid this happening:

  • The Government can call-off the elections – revoking the ‘writ’ that was sent to all returning officers notifying them UK participation in election and requiring them to call for candidates and make arrangements for the election.  In this case the terms of the latest Brexit extension granted by the EU require the UK to leave the bloc at 11:00pm on 1 June 2019 under no-deal conditions;

  • Theresa May could continue to try to get a majority in Parliament to accept the ‘Withdrawal Agreement’ before 22 May – whilst allowing sufficient time to complete legal processes in the EU and UK before a Brexit at 11:00pm on 30 June 2019 under the conditions set out in the withdrawal Agreement part of her ‘deal’. 

The first option would fly in the face of Parliament’s instruction to the Prime Minister to avoid a no-deal Brexit; and informed opinion is that it is now too late to complete the process to leave with a ‘deal’ as Parliament has demanded certainty in the associated long-term terms, known as the Political Declaration.

Business and commerce should not stand down their no-deal contingency planning for the next six weeks.

They can, however, now more confidently factor ‘continued UK membership of the EU’ into medium-term strategy planning and budgeting - at least until the end of October 2019.

We agree with the sentiments of Foreign Minister, Jeremy Hunt MP, speaking to the BBC 4's ‘Today’ program from Japan, where he is on an official trip.  He urged a quick resolve and agreement on a deal, saying the UK's trading partners “just want Britain to make up its mind on Brexit and get on with it.”

He is meeting carmakers and telecoms companies and maintains that: "whatever the outcome of Brexit, Britain is going to be the best place in Europe to invest in".  But, he added: "It's absolutely clear that Brexit paralysis - if it continues for a long-time - will be highly damaging to our international standing”.  People are worried that the UK: “will become submerged in the mire of Brexit indecision."

If Sir Vince Cable, the leader of the Liberal-Democrats, gets his way, Brexit could be postponed indefinitely – and should be included as a scenario in strategy planning.  On Radio 4’s ‘Today programme’ this morning, he called for all Remain-backing parties to "fight together under the same banner" in the upcoming European elections: “there's a variety of different parties offering the same message…it's not crazy”.  However exploratory talks with other like-minded parties and movements “didn't get a positive reaction…so we are going on our own."

Meanwhile, cross-party talks between the government and the Labour Party are continuing this week to find a way through the Brexit impasse.  The talks also seem to be stalled with Labour leader, Jeremy Corbyn, said no agreement had been reached and the government "doesn't appear" to be shifting its stance on key issues, including its opposition to a customs union with the EU.

And the Electoral Commission has approved ‘The Independent Group’ application to register as a political party.  The group - made up of 11 former Labour and Tory MPs who quit their parties in February - will become ‘Change UK’.  The approval means they although they are too late to field candidates in thee 2 may local elections, they can now put forward candidates in the European elections due to take place on 23 May.  Two former Conservative MEPs, Julie Girling and Richard Ashworth, confirmed they were joining ‘Change UK’ and hope to stand as candidates in the European elections.

 Background: European Parliament elections on 23 May 2019

The political landscape was very different the last time the European elections were held in 2014.

The Conservatives and Lib-Dems were in coalition in the UK.  David Cameron had signalled his willingness to hold an EU referendum if he won an overall majority - the prospect still seemed remote.

With hindsight, the 2014 European Parliament results should be seen as a pointer of things to come in the 2016 referendum.  UKIP topped the polls for the first ever time - winning nearly 27% of the vote and 24 of the 93 UK-MEP seats.

European elections have historically been more fertile territory for anti-establishment parties, which have struggled to translate votes into seats in general elections because of the first-past-the-post system.

Both Conservative and Labour parties should be nervous that this trend will continue if the polls go ahead on 23 May.

How long any UK MEPs get to stay in Brussels and Strasbourg is anyone's guess at this stage.  The new European Parliament will reassemble on 2 July, and the Brexit extension is due to run up to 31 October.  It is no longer beyond the realms of possibility that UK politicians and their staff, who only recently were contemplating a future outside the European Parliament, will find themselves there.

Political parties have to submit the names of the candidates representing them to the elections watchdog by 25 April or, in the case of the ‘South West and Gibraltar’ region, 24 April.

MEPs are elected on a regional list basis, representing Scotland, Wales, Northern Ireland and nine English regions, using a system of proportional representation.

 Background – Process and timeline for a UK General Election

Given the increasing clamour coming from within the Tory party to force a change of leadership, the stalled Brexit talks between the two main parties, and the need to deal with the outcomes of local and European Parliament elections…it is entirely possible that a general election could be called.  We outline the process and requirements.

UK Parliament has to be ‘dissolved’ 25 working days before a polling day under the ‘Fixed-term Parliaments Act, 2011’.  Members of Parliament cease to be MPs, as soon as it is dissolved.  They may not enter the Palace of Westminster, although they and their staff continue to be paid until polling day.

The Act includes giving the Sovereign the power to ‘prorogue’ Parliament, under the ‘Supplementary provisions’ of the Act.  Parliament is usually prorogued - or adjourned - before it is dissolved.  This allows Parliament to sit for a few days in order to finalise Parliamentary business.

Prorogation of a Parliament effectively terminates a session.  Parliament then stands ‘prorogued’ until the opening of the next session.  As with the ‘summoning’ and ‘dissolution’ of Parliament, ‘prorogation’ is a prerogative of the Crown - taken on the advice of the Prime Minister.

Parliament was last prorogued and dissolved on 3 May 2017 – ahead of the general election held on 8 June 2017.  

Dissolution needs a two-thirds majority vote by the House of Commons, as required by the Fixed-term Parliaments Act.

A Royal Proclamation ‘summoning’ a new Parliament is issued, fixing the date when the Houses of Commons and Lords are required to ‘assemble’.   

‘Writs of Election’ are sent to returning officers of each constituency to call for candidates and make all voting arrangements.

A general election must be held 17 days, excluding weekends and bank holidays, after the Proclamation summoning Parliament.

John ShuttleworthComment