Brexit commentary | 06 Jun 2019

The Conservative leadership contest: timing implications for Brexit

Overview

From the UK's perspective, the next steps in the Brexit process are likely to be influenced by the choice of Theresa May's replacement as Prime Minister and leader of the Conservative Party.   What is the timing of the Conservative leadership election and how will this affect Brexit?

Timing of Conservative leadership election

Key dates in the Conservative Party's leadership election process are as follows:

  • 10 June – nominations close at 5 pm (candidates must have the support of 8 MPs).
  • 13 June – first ballot of MPs (any candidate receiving 16 votes or fewer will be eliminated).
  • 18 June – second ballot of MPs (any candidate receiving 32 votes or fewer will be eliminated).
  • 19 and 20 June – further ballots scheduled;  if ballot thresholds are met by all candidates, the candidate with the lowest number of votes will be eliminated (a rule which applies to the first and second ballots as well).  Ballots will continue until only 2 candidates remain.
  • Late June-July – Conservative Party members to vote on the remaining 2 candidates (before that vote, there is likely to be a short period to allow e.g. hustings by the remaining candidates accessible to Party members).

Press reports indicate that the Conservative Party hopes to have the process concluded - and a new leader and Prime Minister in place - by the end of the week of 22 July.  At the time of writing, it was unclear whether Parliament would have started its summer recess by this point.

Implications for Brexit

The key issue that the new Prime Minister will have to address is whether to seek a further extension of the UK's membership of the EU, beyond 31 October 2019. Several leadership candidates have indicated that ideally, they would like to explore the possibility of changes to the current deal.  It is questionable whether the period between the end of July and September/October will provide sufficient time for this and the EU has repeatedly insisted that it will not re-open the draft Withdrawal Agreement (WA) (although it might be willing to reopen the draft Political Declaration). Some commentators have suggested that if the UK seeks another extension (and the EU is prepared to agree to it), it is likely to last until June 2020 (as this is the last date for agreement to be reached on the EU's net 7 year budget plan).  

Another option would be to seek to change the Parliamentary arithmetic in the UK by calling a General Election.  In 2017, a general election took place just under 2 months after being called by the current Prime Minister (and being ratified by the two-thirds majority of MPs, as required under the Fixed Term Parliaments Act 2011).  This suggests that a General Election could be held in sufficient time to allow the new Parliament to vote again on the draft WA ahead of 31 October (although if the summer recess was already underway by the time the new Prime Minister takes office in July, Parliament would presumably have to be recalled).  That said, it is questionable whether there would be sufficient time to pass the necessary UK implementing legislation ahead of October  (in which case, an extension would still be needed).   The WA would also need to be ratified by the European Parliament (EP).  Although the timing would be tight, this appears to be feasible ahead of 31 October because the EP will be in session in September and October (and has several sitting days in the penultimate week of October, for example).

No deal?

If a new Prime Minister fails in an attempt to renegotiate the deal, no deal looms back into view and some candidates have indicated that they would be prepared to proceed with a "no deal" Brexit (and in some cases would actively pursue it as their main strategy).  If this is what the new Prime Minister decides to do, he or she will need to act quickly in July to reactivate "no deal" preparations – and businesses will need to look again at their own "no deal" contingency plans.  There is uncertainty over whether Parliament could stop a Prime Minister who was determined to leave the EU without a deal.  Some commentators argue that the scope for MPs to block no deal is very limited, especially now that the provisions of the EU (Withdrawal) Act 2018 dealing with a "no deal" scenario have expired (as this was how MPs prevented a "no deal" exit earlier in the year).  Others argue that MPs, possibly assisted by "creative" procedural decisions from the Speaker, would still find a way to prevent an exit without an agreement.  The lack of clarity around this issue means that businesses should not assume that the UK's membership of the EU will be extended beyond 31 October.

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