Vulcan Insight

Johnson’s Withdrawal Agreement goes before Parliament

20 December 2019

It’s been a week since the Conservative Party won their biggest majority since Thatcher’s victory in 1987. Prime Minister Johnson now has enough seats to guarantee an outright majority in parliament, something he will need today as MPs vote on whether or not to back his Withdrawal Agreement, which would see the UK leave on the EU on 31 January 2020. Amendments opposing the Bill have been tabled by SNP, DUP and the Lib Dems. Scottish nationalism has shown itself as a force that the Prime Minister cannot control, with the SNP calling on the government to ensure that it does not leave the EU without the consent of the Scottish Parliament. The DUP have also registered their opposition, saying that the Bill does not comply with the rules agreed in the Good Friday Agreement. However, Johnson’s significant majority will allow Johnson the period of political grace that he didn’t get when he was first elected as Prime Minister. Moreover, the Labour party has been shattered and it appears that there will be continued infighting in the opposition party in the coming months, as they decide on the future leadership and direction of the party.  

Speaking in the House of the Commons this morning, Prime Minister Johnson said the Bill ‘paves the way’ for an ambitious free trade deal with the EU. If the Bill is passed, it would also ban the government from extending the transition period, in which the UK adheres to EU rules, past 2020. Although this transition period could technically be extended until December 2022, Johnson has ruled out this possibility. The Department for Exiting the EU has warned that this tight deadline risks a disorderly Brexit. Speaking to the European Parliament on Wednesday, Commission President Ursula von der Leyen said the if an agreement is not concluded by the end of 2020 that ‘we will face again a cliff edge situation’. The experienced EU negotiation team have warned that the brevity of the 11-month negotiation period will limit the scope of the trade talks. The wave of optimism seen in UK markets last week may now revert to its Brexit baseline of continued uncertainty as the economic future of the UK remains unclear.

However, the government will want a deal with the EU which causes minimum disruption to the British economy. Mr. Johnson must decide if he wants to negotiate a quick deal, aligning Britain very closely to the EU single market, or embark on a tougher negotiation with the EU aimed at significant divergence. The Prime Minister may also now be mindful of not pushing Scotland further away in any upcoming trade deal. Although a Free Trade Agreement (FTA) would prove challenging to negotiate in 11 months, it remains a distinct possibility. A FTA could remove tariffs and quotas on all goods traded between the two territories. The EU have made it clear that due to the size and proximity of the UK, this would be dependent on the UK complying with EU-level-playing-field demands. As compliance with EU rules and regulation may preclude the UK from agreeing a wide-ranging FTA with the US, the Prime Minister will have to decide which trade deal his government will prioritise. 

The Parliament will break for Christmas after its sitting today, returning on 7 January, with the Bill expected to complete its passage into law in time for Brexit to take place at the end of the month.