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A New Prime Minister, Same Old Brexit? The View From London

On 23 July, the UK will have a new Prime Minister. Both the front-runner Boris Johnson and his challenger, Foreign Secretary Jeremy Hunt, have promised to renegotiate the Withdrawal Agreement – something European leaders have dismissed out of hand – or leave with no-deal on 31 October.

APCO’s experts in London and Brussels consider how the two candidates would approach Brexit as Prime Minister, and how EU leaders are likely to respond.

The view from London

One pitches himself as the mercurial populist; the other, a competent technocrat. But for all their differences, Boris Johnson and Jeremy Hunt would approach Brexit in remarkably similar ways as Prime Minister.

Both believe Britain should leave the EU by 31 October, preferably with a deal. Both say they are prepared to walk away without one if the negotiations prove fruitless. And both think an early general election this side of Brexit would be catastrophic for their party.

They agree the key sticking point is the fear that the Northern Ireland Backstop might trap the UK indefinitely in the EU’s regulatory orbit, preventing post-Brexit Britain from developing its own trade deals. The implication is that only substantive changes to the Withdrawal Agreement, such as a time-limit to the Backstop or the use of technology to avoid a hard border between the UK and Ireland, would be acceptable. Neither would likely be satisfied by (non-binding) assurances in the Political Declaration on the future UK-EU relationship. The argument that the EU itself is not terribly interested in ‘trapping’ the UK in this way is barely heard.

Although both candidates have not explicitly said what would represent a good deal, we can see clear differences in how each would approach the negotiations and how committed each would be to no-deal.

Mr. Hunt has said he would like a compromise acceptable to the EU and Parliament, and that his career in business and more statesmanlike approach would help him achieve this. Because his Government would still lack a majority, the inference is Mr. Hunt’s deal would involve a milder form of Brexit and less disruption to current trading and regulatory arrangements – something which would be welcomed by many businesses – although Hunt has been careful not to spell this out himself.  And if Britain had to leave with no-deal, Prime Minister Hunt would look for other ways to keep the UK competitive such as cutting corporation tax to 12.5%.

For Mr. Hunt, key question is whether he, as someone who voted Remain in 2016, could really secure a deal that the 20-30 ‘Spartans’ – Conservative MPs who want the purest possible Brexit and are relaxed about no-deal – could support?

Mr. Johnson would be more prepared to negotiate aggressively with Brussels, and go for no-deal if required, saying Britain “can…must and will” leave by 31 October “do or die” – tough rhetoric Mr Hunt has matched during the campaign. Mr. Johnson has suggested that he wants a more substantive renegotiation of the Withdrawal Agreement, and ultimately, as comprehensive a free trade deal with Brussels as possible. To get around the EU’s opposition to unpicking the former and discussing the latter before the terms of departure are agreed, he has threatened to withhold Britain’s £39bn ‘divorce’ payment – a move some believe would be illegal – and suggested that free trade could continue under WTO rules while a future deal was being negotiated – which has already been flatly rejected as a fantasy solution.

The questions that would accompany Prime Minister Johnson’s approach would therefore be more numerous, and fundamental. Would he really risk withholding the divorce payment or going for no-deal, given the potential negative impacts on Britain’s international standing, the economy, and his own future electoral prospects? Would the EU even regard these as threats Mr. Johnson can credibly make, given the Parliamentary arithmetic and willingness of the Speaker to give MPs a say? The one certainty appears to be that a Johnson premiership would bring significantly more uncertainty and volatility.

Ultimately, as with his opponent, political matters beyond Johnson’s direct control may well prove decisive. In addition to the ‘Spartans’, the groups to look out for are the ten Democratic Unionist Party MPs who want Brexit to happen on 31 October and would not support any move which undermined Northern Ireland’s position within the UK; the up to 30 Tory MPs who are so opposed to no-deal that they would be prepared to bring down the Government; and the 26 Labour MPs representing Leave seats who are preparing finally to vote for Brexit, preferably with a new deal, but under no-deal if necessary.

Click here to read the view from Brussels on how European leaders are likely to react.

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