Why this is important to Wisconsin businesses: While international trade deals must still be negotiated, the UK can now turn to domestic matters that had been placed on the back burner.
After more than three years of uncertainty caused by Brexit, the United Kingdom took a step forward with the decisive outcome of the December general election. The Conservative vote swept aside many Labor-controlled seats to dramatically change the representational map, taking 44% of the vote and winning 365 seats—163 seats more than the Labor Party, which lost 60 seats, mainly to Conservative candidates. As a testament to a growing movement for Scottish independence, the Scottish National Party took 45% of the vote and gained 81% of Scottish seats in the House of Commons.
Immediately after the election results were announced, Prime Minister Boris Johnson promised to “get Brexit done on time” by Jan. 31. An amended withdrawal bill has passed the first of three stages and should receive final approval by Jan. 9. The bill removes a number of concessions from previous versions, most significantly leaving negotiations on a new EU-UK treaty entirely in the hands of Johnson’s government.
While the three-year impasse has been overcome, the truly difficult work lies ahead, as the government addresses myriad domestic and international challenges. Critically, this includes avoiding a no-deal Brexit by negotiating a free trade deal with the EU, to take effect by the end of 2020. Senior EU leaders have suggested this deadline is virtually impossible, and more likely is a “vital minimum” agreement on the trade relationship. The EU has about 40 free trade deals that cover more than 70 countries. This means the UK, as a member of the EU, can currently trade with countries like Canada without having to pay tariffs on most goods. Prior to the election, the UK had been working to replicate all EU trade deals, but to date has only signed 20 “continuity deals” covering 50 countries—representing just 8% of total UK trade. The UK has also signed “mutual recognition agreements” with the U.S., Australia and New Zealand, but these are not free trade agreements. In addition to the withdrawal agreement, negotiations must also address the UK’s £39 billion financial obligation, the security relationship, citizens’ rights and the Northern Ireland trade framework.
Domestically, UK public services have languished while Brexit dominated pre-election politics. The Queen’s Speech, which sets out the government’s agenda for the coming year, includes a ban on all-out rail strikes, an overhaul of the constitution, a counterterrorism bill providing tougher sentences for terrorists, an espionage bill to crack down on the activities of hostile states, a new employment bill that would give employees more power over when they work, and a cut in business tax rates for retailers. The proposed National Health Service (NHS) funding bill would enshrine an annual £34 billion increase in NHS funding through 2023. Human rights, immigration, transportation infrastructure, building and fire safety, internet safety and criminal justice are also priorities named in the 2020 strategy.
With its huge parliamentary majority, the Conservative government should face little difficulty in advancing its agenda, especially while the Liberal Democrats and a much-weakened Labor Party are busy electing new leaders.