On 7 May, David Lidington, the de facto UK Deputy Prime Minister confirmed that, despite the UK government’s desire to have left the EU prior to 23 May, the UK would participate in the European Parliament elections. Indeed, with UK Prime Minister Theresa May’s deal having been rejected three times by the UK House of Commons (HoC) and the Article 50 period extended, many had considered it a foregone conclusion for some time. So what will be the outcome of the European Parliament election in the UK, what impact will it have on the EU and what does it mean for business? Understandably, many see the focus being on the implications of the vote for British domestic politics and expect the results to give an indication of where the country stands on Brexit. We may also be able to draw conclusions about the health of the traditional parties and the prospects of the new contenders.
Recent polling suggests that UK MEP Nigel Farage’s newly established Brexit Party, which launched its campaign on 12 April – just days after Article 50 was extended, will ‘win’ the UK election with around 33 percent of the vote (26 seats). The poll predicts that Labour will be in second place with around 17 percent of the vote (14 seats), just ahead of the Liberal Democrats on 15 percent (12 seats). The Conservatives on the other hand are projected to command just 9 percent of the vote (7 seats), a significant decrease as compared with the 2014 European elections when the party won 19 seats. While this election will have no direct bearing on the current UK government, there are two important immediate consequences if the result is in line with current polling:
- It will strongly signal that the majority of voters in the UK are dissatisfied with the UK government’s handling of Brexit and that a large minority would seem to be in favour of leaving the EU on WTO terms; and
- It will impact the size of the European Parliament’s political groups: If the UK were not to take part in the elections, the size of the European Parliament would be reduced from 751 seats to 705 and certain groups (S&D, ECR and far-right) would lose their significant delegation of UK MEPs. With key decisions, such as the appointment of the lead positions in the European Commission and European Parliament, depending on the outcome of the election and taking place prior to when the UK is scheduled to leave, the presence of UK MEPs will impact the balance of the political groups when it matters most.
It remains to be seen what kind of role the UK MEPs will assume in the European Parliament, especially given that they are currently only intended to hold office until 31 October 2019. Some, such as incumbent Conservative MEP Ashley Fox have a good reputation in Brussels, especially on financial services, and may continue to play a role in relevant legislation. Others, such as Farage, have had a disruptive presence (from the perspective of the pro-Europeans) and, considering the anticipated increase of Eurosceptic MEPs from other EU Member States, could have an even greater impact than before. However, while Council President Donald Tusk was adamant that UK MEPs will be “full Members of the Parliament, with all their rights and obligations”, we consider it unlikely that they would be in the running for key positions in the European Parliament’s committees (for example, Conservative and former MEP Vicky Ford chaired the influential Internal Market and Consumer Protection (IMCO) Committee prior to being elected an MP in 2017).
What does this all mean for business? While UK MEPs had typically been the first point of contact for UK and U.S. firms headquartered in the UK, their influence had already waned significantly following the result of the referendum in 2016. In addition, the new Commission (President and Cabinet of Commissioners) will not take office until November (or later), so there will be very little legislation that they will actually deal with. Nonetheless, the loss of the UK MEPs as a liberal, pro-business voice in the European Parliament will surely be felt by many companies.