Baffled By Brexit? How to Follow the Latest Twists
More than three years after Britain voted to break away from the EU, the country is still tearing itself apart over Brexit.
(Bloomberg) --
More than three years after Britain voted to break away from the European Union, the country is still tearing itself apart over Brexit. Parliament has moved to thwart Prime Minister Boris Johnson in his plan to leave the bloc by Oct. 31 even if no formal agreement with the EU is in place. The murky outlook has the pound see-sawing, and there’s a growing sense that only a general election can break the impasse.
1. Will the U.K. have an election?
It’s certainly looking that way, but it’s a matter of when. Johnson plans to propose a vote on Oct. 15 to Parliament on Monday in a bid to secure a mandate for his Brexit approach. A ballot just two weeks before the Oct. 31 Brexit deadline would leave a new government little time to reach or implement an exit deal with the EU. While the opposition has been clamoring for an election for months, they plan to deny Johnson a new vote until they can ensure the U.K. can’t tumble out of the EU without a deal. Under legislation passed this week with backing from almost two dozen rebels from Johnson’s Conservative Party, the premier must request a Brexit delay on Oct. 19 if he hasn’t secured a new divorce deal by then. That means no election is likely until November, because at least 25 days must pass after a vote is called.
2. Will an election solve the Brexit impasse?
That’s the big question. Johnson is trying to cast himself as the hero determined to implement the will of the people who voted to leave the EU, gambling that Britons are so tired of the wrangling over the issue that they’ll vote for him to get it done. Polls currently put the Conservative Party ahead, and Johnson is an accomplished campaigner and the most famous politician in the country. The opposition Labour Party leader Jeremy Corbyn, whose socialist agenda spooks investors, has been asking for an election since he narrowly lost the last one in June 2017. Johnson’s predecessor, Theresa May, called that vote to seek a mandate for Brexit only to lose her majority in parliament, fueling the impasse.
Read more: Bloomberg Economics lays out the scenarios for an election
3. What’s driving the timing?
An election date depends in part on the legal mechanism used to trigger the poll. On Monday, Johnson is expected to propose another motion for an election on Oct. 15 under the Fixed-term Parliaments Act of 2011, which sets out rules for triggering a ballot sooner than the regular five-year gap. It requires a two-thirds vote in Parliament -- 434 lawmakers. He has tried this once already, and lost. On Monday, he will have another go, but it is his last chance to get it done in the time frame he wants -- before Oct. 31. That’s because he’s suspended Parliament for five weeks starting from Sept. 12. Johnson would fight an election arguing that he should be given a mandate to deliver Brexit, a message he wants to take to a meeting of the EU council on Oct. 17. Another method for triggering a poll would be a vote of no-confidence in the government, which would require a delay of 14 days and push the election date later.
4. Will Brexit be delayed?
The measure passed by Parliament on Sept. 4 requires Johnson to extend exit day to Jan. 31, if he hasn’t either reached a deal with the EU by Oct. 19 that’s approved by Parliament or secured MPs’ agreement for leaving the bloc without a deal. But many lawmakers say they don’t trust Johnson to abide by Parliament’s will or follow constitutional norms. Johnson said Thursday he’d “rather be dead in a ditch” than ask the EU for another extension.
5. How did it come to this?
It’s a face-off between a combative new leader, who argues that threatening to walk away from talks with the EU gives him leverage, and a majority of MPs convinced that Britain crashing out of the bloc without any formal agreement would cause vast economic harm. The tussle has raised concerns that Britain is heading for a constitutional crisis. On Aug. 28, Johnson asked Queen Elizabeth II to suspended Parliament from Sept. 12 until the Queen’s speech on Oct. 14. That galvanized his opponents, who realized they had little time to act to prevent a no-deal Brexit. The maneuver reflects Johnson’s do-or-die approach to getting Britain out of the EU by Oct. 31. He has promised to renegotiate the divorce deal struck by former Prime Minister Theresa May who failed to win the backing of her own Conservative government. His focus is on stripping out the controversial Irish backstop, a fallback designed to prevent a hard border between the Republic of Ireland, which is staying in the EU, and Northern Ireland, which is leaving along with the rest of the U.K.
6. What would a no-deal Brexit mean?
It would leave the U.K. lacking legal arrangements to smooth trade and other transactions with its neighbors. Bottlenecks could bring shortages of everything from food and drugs to manufacturing components. Both sides are preparing for the worst, including taking steps to prevent a financial-markets meltdown. Those measures can mitigate some of the more catastrophic outcomes -- such as flights being grounded -- but they won’t address barriers to trade that would suddenly emerge. Both sides have said they would try to avoid a hard border in Ireland, but one would probably become necessary eventually.
7. Can Brexit be called off?
Yes, but there are still major obstacles. At least for now, there isn’t a majority in Parliament behind proposals to hold a second referendum. Corbyn has come out in favor of another plebiscite, but with reservations. May was adamant that a re-vote would undermine faith in democracy and rip the country apart -- a view many share. In any case, it’s not clear what the result of a re-run would be -- or even what question would be put to voters. Polls indicate that voters are now more in favor of remaining in the EU than leaving, but that’s what surveys showed last time, too. The U.K. does have the legal right to cancel the divorce by revoking the Article 50 notification that triggered the exit process -- but doing that without a referendum would be political dynamite.
8. What’s the fallout?
Companies operating in Britain have bemoaned the lack of clarity over the impact of Brexit, warning that unanswered questions about everything from trade policy to immigration laws are throttling hiring and investment decisions. Global banks have already moved operations, assets and people to Frankfurt, Paris and other cities. Manufacturers and broadcasters have also started moving facilities, while companies and households have been stockpiling.
The Reference Shelf
- Bloomberg Businessweek: “Britain’s Businesses Have Already Lost, Brexit or No Brexit,” and England’s disconnect with the rest of Britain.
- QuickTake explainers on no-confidence votes, a hard Brexit, how a customs union could define post-Brexit trade and how “equivalence” will shape financial services.
- Add data sharing and repatriation to the list of Brexit bumps for the U.K. and EU.
- Bloomberg Opinion presents views from Therese Raphael and the editorial board.
To contact the reporter on this story: Flavia Krause-Jackson in London at fjackson@bloomberg.net
To contact the editors responsible for this story: Leah Harrison Singer at lharrison@bloomberg.net, Andrew Davis
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