It’s now 91 days until Brexit, we have had just over one week of Prime Minister Boris Johnson and today we have a by-election which could determine the fate of the entire Government.
So, what does the first week of the new regime mean for Brexit and what can it tell us about how this new approach may impact on the UK tech sector?
With the election of Boris Johnson we now have a new Prime Minister who has made no secret of his commitment to the leave the EU by October 31. However, despite this reinvigorated approach, many of the problems that bedevilled Theresa May still loom large for Boris Johnson, deal, or no deal.
On achieving a deal the Parliamentary arithmetic makes life for the new Prime Minister difficult. The necessary, however not sufficient requirements for a deal requires a change which removes or achieves significant changes to the Northern Ireland backstop. This would help secure the support of the DUP, however, Mark Francois, Deputy Chairman of the Brexiteer European Research Group has suggested that changes to the backstop may not go far enough, saying on the BBC’s Newsnight that further changes to the withdrawal agreement would be needed or else his MPs would vote against any new deal.
Without both the DUP and the ERG the chances of a deal passing look slim, as without a full complement of Conservative MPs, supported by their DUP allies any chance at getting something through Parliament is low. The problem would be made worse as in the instance that the chances of a deal passing look slim wavering Labour MPs who may support the Government if they knew it would get a deal over the line will be less inclinded to lend their support and bear the consequences of an opposition MP voting with the Government. Therefore, like Theresa May before him, Boris Johnson could fail to convince Parliament to take a chance on any new deal he is able to negotiate with the EU.
On pushing for no deal, the Parliamentary arithmetic comes into play again, although this time the threat to the Government comes from the remain, rather than the Brexit side. Currently the Government has an effective majority of two, if the August 1st Brecon and Radnorshire by election sees the incumbent Conservative MP defeated, that majority will reduce to one.
In a Parliament with a remain tendency and Conservative MPs and former Cabinet Ministers such as David Guake and Phillip Hammond now on the backbenches, and not to happy with the current administration, Parliament now presents a real obstacle to no deal, either through some Parliamentary chicanery or a no confidence vote on an increasingly precarious Government.
And as if Parliament wasn’t tricky enough, the efforts to renegotiate a deal come against the backdrop of an EU who wants to push the new Government to the limit before making any concessions. Concessions, which even if they come, may simply not be enough, or through the very process of brinkmanship that’s looks likely to feature in creating, them could be result in a political environment so hostile to compromise that the UK Government or the EU may not feel confident to push for an agreement.
Deal or no deal the Government’s position is delicate. However this could all be changed through a general election; but the new Prime Minister has said that he will not call one before Brexit. Although we have heard that one before.
Irrespective of its success the Government is determined to make sure no deal preparations are strongly advanced. Michael Gove has been put in charge of preparing the Government for no deal prep holding daily meetings on the progress of preparations and has been given plenty of resources to prepare the UK the best he can for a no deal exit on October 31st.
With a Government taking the prospect of no deal very seriously the tech sector must do so as well, and seek to gain mitigating support from the Government where it is available.
For the UK tech sector the damage that could result from no deal principally emerges from non-tariff barriers to trade. These include disruptions to standards, regulation and losing membership to key organisations such as the European Investment Fund, Horizon 2020, loss of freedom of movement and the implications a no deal exit has for data flows.
These issues are trickier to tackle as there is limited preparation the UK can do on its own without co-operation with the EU. However, as the trajectory of the next phase of Brexit becomes clearer techUK will continue to reach out to the UK Government and friendly organisations in Brussels and the EU 27 to make the case for arrangements to protect UK tech businesses and minimise disruption to them and importantly their business partners and customers in the EU.
Over the next few weeks we will be consulting members on their preparations for no deal and what steps the Government could take to ensure the UK tech sector receives support in the event of no deal. If you have any questions or would like to engage more with techUK’s work preparing for no deal please get in touch at the contact details below.