Boris' electoral bonanza

Topics Brexit

There can be little doubt that the Conservative Party’s emphatic electoral victory underlines the electorate’s hopes that the government would finally “Get Brexit Done”, just as Boris Johnson has promised. The Conservatives won a decisive majority (365 seats in the 650-seat House of Commons) that the party has not seen since 1987, thanks to an unequivocal messaging (including its subliminal promises of keeping out job-snatching immigrants) that resonated strongly in the unemployment-ridden Midlands, which have been Labour strongholds for decades. This authoritative performance frees Mr Johnson of the party's reliance on an Irish unionist party to get a withdrawal deal through Parliament. No surprise, the pound staged its biggest rally in almost three years and the FTSE 250 rocketed to a record high as house-builder, bank and utility stocks surged after the election results (as did Tata Motors in India, since its subsidiary JLR derives a fifth of its sales from the UK). 

The mandate ends the possibility of reversing Brexit via a referendum or revoking Article 50 of the Lisbon Treaty, which outlines the exit process, but the timetable for Mr Johnson to make good on his campaign promise is challenging. He has until January 31, 2020 — a thrice-extended deadline — to secure Parliamentary approval for a withdrawal deal (the treaty that will govern the terms of the UK’s exit from the EU). The principal sticking point here remains the Northern Irish border, the UK’s only land border with the EU (via the Republic of Ireland). His predecessor, Theresa May, sought to satisfy Irish unionist allies by avoiding a “hard border” and keeping the whole of the UK (including Northern Ireland) in the EU until the new relationship is negotiated, a programme that pleased nobody because it weakened the UK’s position in the interim. Mr Johnson’s scheme sought to make a distinction by drawing a border in the Irish Sea. Northern Ireland would continue to follow EU single market rules on goods and operate a dual tariff system, applying the EU’s common external tariff on any goods entering Northern Ireland but destined for the EU. This would require additional border checks and barriers to trade between Great Britain and Northern Ireland. The rest of the UK would exit the EU customs union, leaving it free to negotiate trade agreements with other non-EU countries (the US and India, for instance). This agreement actually passed a second reading but lawmakers — including Conservatives — rejected a fast-track timetable to vote it into law. The party’s manifesto did not offer details on how any subsequent withdrawal deal would be different. In fact, Mr Johnson is now likely to face the prospect of recurring tensions with Northern Ireland, with whom a peace agreement was signed only 21 years ago. The significant electoral gains for the anti-Brexit separatist Scottish National Party will compound his problems. That he understands this — including the fact that his party gained less than 2 per cent of the vote share — was clear in his post-victory speech in which he stressed the need for unity. 

Finally, even assuming the withdrawal deal is ratified by both Parliament and the EU, Mr Johnson will have till December 2020 to negotiate and ratify a full agreement on the future relationship. Given that the withdrawal agreement has taken more than three years and is still to be ratified, a new EU-UK trade deal, which involves issues of far greater complexity, is unlikely by that time. Mr Johnson then has the option of extending, just once, the transition period by one or two years, and the deadline for that is July 2020. The prospect of the UK exiting the EU without a deal and all the uncertainties that this might entail remains a very real possibility still.

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