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Latest thinking

What now for Brexit?: Post Election Briefing

9 June 2017

Jurisdictions: United Kingdom

In the UK’s General Election on 8 June 2017, Theresa May’s Conservatives fell short of a Parliamentary majority even though they secured the largest share of the popular vote and seats in the House of Commons. Mrs May has since confirmed her intention to continue as a minority government.

This raises a number of issues for an already uncertain Brexit process. Will the Brexit deal the UK seeks remain unchanged? Can negotiations realistically start on 19 June as planned? There seems little doubt that there will be increased instability in the UK political position for the foreseeable future. Will the minority government be able to operate effectively?

We address below some of the key questions arising in this context.

1. COULD THE TIMETABLE FOR BREXIT CHANGE?

1.1 Starting negotiations

Q. It has been reported that the negotiations will start on 19 June. Is that a legal requirement?

A. No – that timing is not legally binding. It is a process that the UK and EU teams had planned. However, the overall timetable has been set by the UK's giving notice under Article 50 on 29 March 2017 of its intention to withdraw (the "Article 50 Notice").                                                                                                                                                                                                                                                                                                                                                     

1.2 The deadline for negotiations

Q. The Article 50 notice has already been served. Is that legally binding on the UK?

A. Yes – under EU law, the UK will automatically leave the EU on 30 March 2019 (the "Article 50 Deadline") unless something changes. The General Election outcome has no automatic impact on the timetable or on the process as planned.                                                                                                                                                                                                                                                                                                                                           

Q. Can the Article 50 Deadline be extended?

A. Any extension of the period would require unanimous agreement of the UK and the other 27 EU member states in the European Council.                                                                                                                                                                                                                                                 

Q. Are there any other ways an exit on 30 March 2019 could be deferred to give the process more time?

A. Though unlikely at present, the UK could seek to retract its Article 50 Notice to give itself more time to restart the process later. Alternatively, the UK and EU could seek to reach an agreement under Article 50 (an "Article 50 Agreement") that would have a similar effect to extending the deadline.                                                                                                                                                                                                                                                                                      

Q. If the EU27 do not agree, can the UK retract the Article 50 Notice unilaterally?

A. The law is uncertain on this point and has not been tested. In the UK judicial review claim regarding the Article 50 Notice, the parties assumed that it was not possible as a matter of EU law but the point was not decided by the UK Courts. If the UK sought to retract the notice, that could be challenged in the courts. Any case would ultimately have to be decided by the Court of Justice of the EU.                                                                                                                                                                                                                                                                              

Q. Who might challenge retraction of the Article 50 notice?

A. An attempted challenge could come from the EU, another member state or political opponents to such a move in the UK.                                                                                                                                                                                                                                                      

Q. What would an Article 50 Agreement that had the effect of extending the period look like?

A. The EU and the UK could agree a mechanism for the UK's exit under Article 50 the effect of which would be to provide for a lengthy interim period during which most of the detail of Brexit would be negotiated while much of the status quo was preserved.                                                                                                                                                                                                                                                                                                                                            

Q. Would that require all 27 other member states to agree?

A. No, this could be agreed by a qualified majority of the Council of Ministers (representing the EU27) with the consent of the European Parliament.                                                                                                                                                                                                                                                                                                                                                                                                                                           

Q. What else would need to be in that agreement?

A. It would need legally to provide for (eventual) withdrawal. That is largely a matter of politics but, based on the EU's current negotiation framework, it is unlikely that the EU would be prepared to agree anything which did not address the UK's financial liabilities.                                                                                                                                                                                                                                                                                                 

1.3 The Great Repeal Bill

Q. Will the Great Repeal Bill go ahead?

A. The Great Repeal Bill is intended to provide the legal framework to transpose EU law into UK law and to make changes where needed. Whilst the progress of a Bill is a matter of politics, it appears unlikely that any of the parties in the new Parliament would challenge this basic principle. However, the way in which it does so — in particular, the use of so-called Henry VIII powers that give Ministers the power to legislate without full Parliamentary scrutiny — may be controversial and require compromise.                                                                                                                                                                                                                                                                                                                                                                                                                        

2. HOW WILL THE MINORITY GOVERNMENT OPERATE? 

Q. Does Theresa May need to form a coalition?

A. No. Theresa May remains Prime Minister and is entitled, as a matter of constitutional convention, to try to form a government. She should resign if it becomes clear that she does not have the confidence of the House of Commons and there is a clear alternative.                                                                                                                                                                                                                                                                                                                                          

Q. Without a coalition, what sort of government could be formed?

A. Where no party has an overall majority in the Commons and does not establish a formal coalition, it may govern as a minority government, either on the basis of formal pact with other parties or a series of ad hoc arrangements to get key measures through and avoid a vote of no confidence. It appears Mrs May intends the latter of these with support from the DUP.                                                                                                                                                                                                                                                                                                                                                                                                                                           

Q. Can the Conservative Government pursue negotiations as things stand?

A. If there is significant doubt as to Government's ability to command confidence in the Commons, Purdah rules continue to apply and may preclude engaging in Brexit negotiations.                                                                                                                                                                                                                                                                                                                                                                                               

Q. Could Jeremy Corbyn form a government?

A. Jeremy Corbyn will only have the opportunity to try to form a government if the Prime Minister resigns or a vote of no confidence is passed in the House of Commons. He may, however, begin discussions to establish whether he could form a government if invited.                                                                                                                                                                                                                                                                

Q. Could there be another general election?

A. Yes. The Fixed Term Parliaments Act provides two mechanisms for calling a new election. The Act does, however, mean that no single party in the new Parliament will be able to trigger a new election and that this would not inevitably follow a Government defeat in Parliament.                                                                                                                                                                                                                                                                                  

3. MIGHT THE UK'S POLICY ON BREXIT CHANGE?

Q. Might a new UK Government now decide not to withdraw?

A. Subject to whether it has legal power to retract the Article 50 Notice and/or can obtain agreement from the EU27, the UK Government could seek to retract the Article 50 Notice. However, both main parties have committed to Brexit in their manifestos.                                                                                                                                                                                                                                                                                                                                                    

Q. Could the shape of the deal the UK is seeking change?

A. Yes. The UK is not legally bound to the policy position previously announced. In light of the General Election result, there may be some reshaping of the UK's priorities and negotiating stance. The political message regarding Brexit from the election result is unclear, as is the likely political response. Nothing can be ruled out.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Robert Gardener, Senior Government Relations Advisor, Davidson Ryan Dore working together with Hogan Lovells:

The Prime Minister did not secure the strong backing she sought in calling the election, but nor did any other party receive this backing. Consensus is now the only way forward.

An alliance between the Conservatives and the DUP puts the border with the Republic of Ireland at the heart of negotiations in Brussels. The DUP’s position on Brexit is clear, having campaigned to leave the EU in2016 it now calls for: a “frictionless” border, a role for Northern Ireland as a trade hub between the UK and the Republic of Ireland, a comprehensive free trade and customs agreement with the EU and a soft approach to the free movement of people and goods. A stronger focus on this will draw on some of the negotiating credit a different negotiating team may have used on other policy areas. But the Republic of Ireland has seen significant investment since June last year as companies have been moving there to take advantage of its proximity with the UK. A stronger focus on supporting Irish-British trade could therefore be good news.

The absence of a strong mandate for any one party does not necessarily weaken the UK’s position. The weight of power shifts from the Executive to the Legislature. The UK’s negotiating position will now only be as strong as the consensus given to it by our elected representatives in Parliament. If they can strike agreements between themselves then the position in Brussels will be far stronger, and sustainable, because it is more representative. Parliamentary consensus would clearly require a softening of the UK’s approach, including specifically migration and customs. Unsurprisingly, Parliament has been less keen on retaining the supremacy of the ECJ. The DUP’s increased influence could be critical in bringing some Conservatives over to the softer side.

As ever, the devil will be in the detail but all eyes will now be on Parliament to make Brexit a success, and it is crucial that some party differences are put aside in order to secure this. MPs of all parties are going to be far more influential on the UK’s bargaining position, and this is significant in terms of engaging over the coming weeks. Meanwhile, MPs stepping aside of party politics and getting on with the day-job could be just what the country needs.