2019 is a year which will be remembered for many reasons in UK political terms, but one defining attribute will be the number of superlatives. "First time since the Second World War"; "Largest … smallest … most toxic." As the year in which Parliament was given its say on the detail of Brexit, it has proven to be unrivalled for its cross-party divisions, and complexity and strength of views. Theresa May published the original Withdrawal Agreement at the end of 2018, but withheld a parliamentary vote until after the Christmas Recess when No. 10 realised how difficult it was going to be to win a majority backing for the Bill. Parliament had its say on 15 January 2019, and the Government lost by 220 votes (432 to 202). Subsequent amendments reduced the margin of Government defeat when the House of Commons voted down the second iteration of the Bill on 12 March. As pressure mounted on Theresa May to resign, she announced on 27 March that she would "not lead the UK in the next stage of Brexit negotiations". The third iteration of the Withdrawal Agreement Bill failed to pass on 29 March, and, the day after the Conservatives lost 15 seats in the European Parliament Election on 23 May, Theresa May announced that she would stand down on 7 June. Boris Johnson became Prime Minister on 23 July, leading a minority Government propped up by a supply and demand arrangement with the DUP. Over the summer, the new Prime Minister renegotiated the Withdrawal Agreement with the EU in an attempt to win parliamentary support in the UK. On 3 September, the first sitting day of Parliament with the new Prime Minister, a Conservative defection to the Liberal Democrats left the Prime Minister with no working majority, and later that day a further 21 Conservative MPs had the whip withdrawn for voting with the Opposition. For that day and for the six weeks that followed, the Government lost all votes in the House of Commons. The 2019 General Election was finally called on 31 October and held on 12 December.
The Conservative landslide provides certainty on the passage of the Withdrawal Agreement Bill, because no further agreement is required from the EU and because all Conservative MPs have signed an agreement to say if elected they would back the Bill in parliament. It is impossible to imagine that the UK will not now leave the EU on 31 January 2020. However, it is a mistake to rely on the Government's 80-seat majority in the House of Commons providing much further certainty for 2020. The next focus for Brexit will be negotiating the future trading relationship between the UK and the EU. As we say in our 13 December blog on the election result, it is unprecedented for a trade deal of this size to be negotiated within 11 months, or anything like that time frame. The Government announced on 17 December that it would introduce an amendment to the Withdrawal Amendment Bill to make it unlawful for the UK to extend the transition period beyond December 2020. However, this amendment would only require a simple majority to be overturned and so the Government would be perfectly able to introduce a one-line Bill to repeal this latest provision if it changed its mind. One thought is that a slimmed-down deal will be struck before the end of the year, delivering political capital to the new Government for having stayed on schedule and within the law, with further agreements struck over the years to follow. Consensus among experts appears to be that if this is not possible there will either need to be an extension or a no-deal relationship.
For business, this extends the uncertainty. It is important to be prepared for no trading relationship with the EU, or a limited arrangement at best. As we also say in our election blog, politicians will draw on rhetoric to strengthen their hand in trade negotiations but it is vital that business does not pay too much attention to this, whether comforting or alarming. The real value will come from direct engagement with Government and policy makers, to influence the direction of talks and to listen to accurate assessments of the direction of travel.