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The BREXIT Election is Finally Here, What Happens Now?

November 11, 2019

 

 

 

 

 

 

 

 

On Thursday, October 17th something unexpected happened: three years after the referendum on Brexit, Britain’s Prime Minister Boris Johnson and the European Union reached a deal to take the United Kingdom out of the EU bloc on October 31st.

 

But a deal in Brussels doesn’t automatically imply a deal in Westminster, and let’s recall that both are a sine qua non for Brexit. 

 

With such pressing deadline – Thursday October 31st Britain is supposed to leave the bloc – and with media continuously bombarding us with news and updates, let’s try to recap as well as to answer a few pressing questions.

 

LET US RECAP:

Until recently, it looked like Britain was doomed. Boris Johnson announced that he would rather be “dead in a ditch” than delay Brexit, talks with Brussels had stalled, and the pound kept on depreciating as the ghost of a no-deal Brexit loomed closer and closer.

 

What is more, the blame game between Brexiteers and the EU leaders went on and on, with a slight (was it really?) “whiff of sexism”.

 

 

 

Then, at the beginning of October, Prime Minister Boris Johnson met with his Irish counterpart, Leo Varadkar to discuss Britain’s proposal and – surprisingly – there was a “pathway to a possible deal”.

 

After Varadkar’s remarks, which rose optimism over the possibility of a deal, the pound soared on the international currency markets. In addition to that, intensive talks with the EU resumed and eventually, a deal was struck at the EU summit meeting on October 17th.

 

Downing Street proposed a deal that was pillared on the one hand on taking Northern Ireland out of the EU customs union, and on the other hand on giving the Stormont assembly (which has been suspended since January 2017) veto over Northern Ireland being part of an EU zone for agri-food goods and products. Brussels has agreed on Northern Ireland’s departure from the EU customs zone, but it has strongly opposed the proposed veto for the DUP.

 

 

 

UK Prime Minister, Boris Johnson.

 

On October 19th, the floor went to Westminster: British Parliament sat for the first Saturday in 37 years to vote on a new Brexit deal, and rejected it. This turning point calls for the need to answer a few questions.

 

 

Question 1: Why is The Irish Border a Stumbling Block For BREXIT?

This is a controversial matter for many reasons. Firstly, because of the historical and violent divide between unionists and nationalists in Northern Ireland. The former advocate for stronger ties with Great Britain, while the latter advocate for Ireland’s unification as an independent entity, separate from Great Britain. One step towards a peaceful coexistence was made when both the UK and the Republic of Ireland joined the EU in 1973. To a certain extent, both unionists and nationalists benefited from this, as it aligned the interests of the UK with those of the Republic of Ireland, thus making it seem as if the entire island was actually united. Nonetheless, a milestone in the Northern Ireland peace process was achieved in 1998, with the Good Friday Agreement, which put an end to decades of violence. Britain’s exit from the EU – alongside with Northern Ireland – risks a return to a hard border between Northern Ireland and the Republic of Ireland.

 

Both EU and UK politicians fear that restoring a border would reignite, or even exacerbate, the conflicts between unionists and nationalists.

 

Question 2: What is The New BREXIT Deal?

The deal made by Johnson and Brussels is very similar to that proposed by former PM Theresa May in terms of the “divorce bill” (about £33bn), the transition phase (the UK will continue to abide by EU rules until December 31st, 2020) and the rights of EU citizens living in the UK and all UK citizens living in the EU (which will be guaranteed).

 

What differs with respect to the deal proposed by former PM Theresa May are the parts that concern Northern Ireland and the future relationship between the UK and the EU.

 

 

 

Labor Party Leader, Jeremy Corbyn.

 

Unlike May’s, Johnson’s deal doesn’t entail the entire UK permanently remaining part of the EU’s customs union. The long-debated “backstop” has indeed been removed: according to the deal, Northern Ireland will be de jure in the UK’s customs territory, but de facto in the European Union’s. This means that all the goods that enter Northern Ireland but are destined for onward transportation across the border, thus entering the single European market, will be subject to European customs duties; on the other hand, goods from Great Britain and destined for sale in Northern Ireland will avoid checks or constraint on their movement.

 

According to Johnson, this deal allows upholding the 1999 Good Friday Agreement, insofar as it doesn’t entail any hard border in the island of Ireland. Hard border and customs are instead moved in the Irish Sea, in the sense that application of duties and monitoring of compliance with European regulations will take place in the ports connecting Great Britain with Northern Ireland. What is more, a joint EU-UK Committee will oversee so as to avoid irregularities, false declarations of unfair competition based on VAT (e.g. a firm moving its sale branch from one side to the other of the border, depending on where the lowest VAT is applied).

 

For what concerns the future relationship between the UK and the EU, the two parties signed a non-binding Political Declaration in which they agree to a free trade zone. Despite being very generic about the future level of integration between the UK and the European single market, Johnson claimed his commitment to maintaining a “level playing field” between UK and EU in terms of environmental protection, labour rights, competition and state subsidies. Johnson’s way to reassure his EU counterparts on the fact that the UK will not leverage less stringent regulation for unfair competition.  

 

 

Question 3: How Much Has BREXIT Cost So Far?

It would be complex, if not impossible, to monetize the cost that Britain had to bear during these 3 years after the referendum on Brexit was held. Nonetheless, what we can do is to highlight some of the effects that the referendum on Brexit had on the British economy.

 

First of all, after the 2016 referendum, UK’s GDP grew at a slower rate than the average if the Eurozone. Second the Pound Sterling (GBP) has been depreciating against the euro (about 20%), with a consequent rise in the inflation rates in the Country.

 

 

 

Scottish Nationalist Party Leader Nicola Sturgeon. 

 

In addition to that, the London Stock Exchange has become increasingly volatile and the real estate has not been left unscathed.  

 

Despite these effects not being utterly and completely attributable to Brexit, it is undeniable that the “Brexit chaos” is posing many strains on the British economy.

 

 

 

Question 4: What Happens Next?

As we all should know by now, in order to be valid any Brexit deal must be approved first by the British Parliament and then by the European Parliament.

 

Despite Johnson’s optimistic remarks, on October 19th the British Parliament withheld its support from his Brexit deal. MPs have indeed inflicted a defeat on Johnson by passing the Letwin Amendment (322 to 306 in favor); the lack of parliamentary approval triggered the Benn Act, according to which the PM is legally obliged to formally ask the EU for a Brexit delay until the end of January 2020.

 

Besides calling for a lengthy delay, the Benn Act could also encourage some opposition MP to trigger a motion of no confidence, paving the way for a general election.

 

Until then, Boris Johnson had taken an imperious stance: “I will not negotiate a delay with the EU and neither does the law compel me to do”, he claimed after his defeat. However, on Saturday October 19th, Mr. Johnson sent 2 letters to the European council president Donald Tusk:

 

(i) an unsigned letter requesting a further Brexit delay beyond 31 October (let’s recall that he was obliged to do so under the Benn Act); and,

(ii) a signed letter in which he wholeheartedly argued against a further Brexit delay.

 

Rest assured, the British PM does not suffer from bipolar disorder; this is just his controversial way of pursuing a specific political strategy.

 

 

 

BREXIT Party Leader, Nigel Farage. 

 

Soon thereafter, perhaps in realization of the negative press he had been getting for his decision, Johnson decided to pincer Jeremy Corbyn into granting him an election. First, Jacob Rees-Mogg, the Leader of the House of Commons had announced that the Tories were pulling the deal away from Parliament. In effect, this meant that the government would simply not allow the Parliament from voting on the deal, because it would never present it for a vote. Then, on October 24th, the Prime Minister wrote to Mr. Corbyn suggesting a parley wherein the current Parliament would get to scrutinize the deal, if they elected to move for an election on December 12th 2019.

 

Initially, Labor Party opposed the idea, realizing that they were trailing in polls. The Fixed-Term Parliaments Act of 2010 requires that 2/3rds of the House of Commons consent to an election, if one is to be held within 5 years of the previous one. Without Labour’s support, the Prime Minister could not get his way on his first (read: third) attempt. However, by this time, the winds had shifted. On October 28th, the Liberal Democrats, with the SNP, announced an offer for an election on December 9th, 2019 instead.

 

 

 

Liberal Democratic Party Leader, Joe Swinson.

 

Sensing his opening, Mr. Johnson promptly changed tack. He abandoned his offer to Mr. Corbyn and found a way around the Fixed Terms Parliament Act. He decided to introduce a new law, that would effectively circumvent the 2/3rds majority needed, with only 50% +1 vote required to pass the new law. Cornered, and worried about the optics of being dragged into an election, Labor gave in to the demands and embraced the elections. Thus, by October 29th, it was certain that Britain was headed to polls on December 12th 2019. The Speaker of the House, John Bercow, retired on October 31st as announced, and was succeeded by Sir Lindsay Hoyle.

 

The last few days have seen the major contenders – Conservatives, Labor, SNP, Lib Dems, and the BREXIT Party – battle it out. As of November 2, the Tories enjoy a lead of around 11% against Labour, according to a YouGov poll. It remains to be seen if Boris Johnson will convert this into a Parliamentary majority, or if his lead will fetter away like Theresa May’s before him.

 

Views expressed are solely those of the author.

 

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About the Author

Born and raised in the small island of Sardinia, Chiara holds a Bachelor in International Economics and Management from Bocconi University and an MSc in Social Policy and Development from the LSE. Her research interests and past experience revolve around migration, gender, social well-being, and environmental health. A voracious reader, tenacious half-marathon runner, and with a forma mentis that is pillared on insatiable curiosity and critical thinking, she has an undying love for the art of writing.

 

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