19 Jul 2019

The Office for Budget Responsibility has published its July 2019 Fiscal Risks Report, including "no deal" stress-test results suggesting a £30 billion increase in public borrowing requirements, flatlining economic activity and an enhanced risk of recession. Meanwhile, the House of Commons voted to accept amendments to the Northern Ireland (Executive Formation) Bill, designed to prevent the government from suspending Parliament during the autumn to ensure that Brexit occurs on 31 October with, or without, a deal.

The House of Commons votes make a strong statement: a majority of MPs are determined to prevent a "no deal" by default.  However, today's votes do not (and cannot) guarantee that result. The amendments were made to a Bill concerned with procedures and deadlines for reviving the Northern Ireland executive. The key amendment provides:

“(2C)
If, as a result of parliament standing prorogued or adjourned, a minister of the crown cannot comply with the obligations in subsection (2A) or (2B), a proclamation under the Meeting of Parliament Act 1797 (c. 127) shall require parliament to meet on a specified day within the period within which compliance with subsection (2B) is required and to meet on the five following days (other than Saturdays, Sundays or a day which is a bank holiday in the United Kingdom or in any part of the United Kingdom) to allow for compliance with subsection (2B).”

It relies on the statutory obligation for Ministers to report to the House of Commons on progress (or lack of progress) in Northern Ireland to ensure that Parliament must meet throughout the autumn period that is critical to the 31 October Brexit deadline. 

While the amendment reduces the risk of suspension, it cannot guarantee that Parliament would have an opportunity to vote on legislation that would be required to avert a "no deal" Brexit. The government controls Parliamentary business. Altering that position, so that opposition or private member Bills could be debated, would require special legislation, similar to the Cooper-Letwin Bill that secured a bare majority of one in April 2019. Wrestling control of Parliament's business schedule from the government would require another significant cross-party effort, and would also require the Speaker either to permit a motion or to select amendments for voting. 

Even if the 18 July majority of 41 could be replicated in any future vote on measures to avert a "no deal" Brexit, the time available for effective measures will be extremely limited. Parliament is due to go into recess from 25 July until September. Party conference season is likely to disrupt sittings in late September and early October. The new Prime Minister's first (and possibly last) European Council meeting is scheduled for 9 October, and that meeting may provide the last viable opportunity to agree a further extension with the EU. 

An agreed extension, taking Brexit beyond the current deadline of 31 October, could be effected through the same statutory instrument procedure that was used in March and April 2019.  If, however, the EU were to refuse to agree to a further extension, then the only available ways to avert a "no deal" exit would be either to:

  • approve and then pass implementing legislation for a Withdrawal Agreement; or
  • secure legislation to amend existing statutory provisions that make "no deal" Brexit the legal default position, and persuade or compel the government to revoke the UK's Article 50 notice. 

It is also possible (but not inevitable) that persuading or compelling the government to legislate for a further referendum, or a general election, would persuade the EU to agree a further extension.  

With confirmation of the Conservative leadership result due by 23 July, the possibility of a vote of no confidence being won or lost before Parliament goes into its summer recess on 25 July, and the short remaining time between September and 31 October, it is clear that the political machinations are likely to continue up to, or perhaps even beyond, the next Brexit deadline. 

The OBR's suggestion of a £30 billion increase in public borrowing requirement stemming from a "no deal" Brexit was based on an International Monetary Fund scenario that it described as "relatively benign" when compared to some (particularly those assuming significant short-term border disruption). While the House of Commons has signalled its wish to block a "no deal" Brexit, that outcome still cannot be guaranteed. Consequently, while Parliament takes its summer break, businesses must continue to plan and prepare for an as-yet undefined Brexit.