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​The Brexit Election

 

On Monday, it was announced that we will be heading back to the voting polls for a Christmas General Election.

The election represents a chance for a major shake up in the Brexit process. For three years the Brexit process has been grinding forward and arguably grounded to a halt six months ago with the final draft of Thresa May’s deal, and her following resignation.

Since then, we have been in a political deadlock Conservatives had a two-month leadership struggle, then two weeks illegal proroguing then two weeks for conferences. We had a brief glimpse of Mr. Johnson’s new deal in early October but was beaten back by Parliament, and Mr. Johnson was forced to ask for an extension until January 31st 2020.

To move forward, something had to give, and this week Parliament back the motion to have an early general election on December 13th. Not all Party campaigns have been launched, so I will not be commenting on that.

What is frustrating is that Government is seemingly taking advantage of business patience. For the second time, wolf has been cried on a No Deal Brexit (March 29th & October 31st). While the new extension will afford business more Brexit preparation time, costly short-term strategies (like stockpiling) to deal with the immediate impacts of a no deal harms business, diverting resources and manpower away from economic growth to Brexit mitigation.

Trading figures highlighting the rise in activity from 2018 Q3, indicating stockpiling, then the sharp drop from 2019 Q1 as we miss the March 29th deadline.

It is not hard to imagine the despair, doubt, lack of capacity if we return in 2020 and once more the threat of a No Deal is being touted for January 31st, and costly strategies are needed… again. This is dangerous, as No Deal remains the default, if we “No Deal by accident”, but no preparations have been made (or not to a proper level), the fallout will be severe.

Once the election has finished, the new Government must not waste time in ruling out No Deal and putting forward its plan for a deal and engagement for business. This will provide some (though not all) confidence in business, who have been largely kept in the dark in this process.

Though I am not entirely convinced this will "solve Brexit". Government could comeback with enough of a majority to push Withdrawal through, but then enter another political civil war on what the future relatonship should be (Single Market, Customs Union, Free Trade etc). We could easily end up in the same deadlock in several months time, but the process may have moved on a small bit...

Back in reality, however, he Chamber will be campaigning to ensure that this won’t be a Brexit dominated election. We want parties to recognise the strengths and potential of the North East, to invest in local enterprise and infrastructure to fuels the region’s economic engine.

Our recent "Global North East" report identifies ten development points that could unlock regional and global prosperity in the North East. Research has found for every 1% of infrastructure investment, there's around 0.9% increase in global activity. Committing to a dedicated project to link up the regional strengths to global opportunities should be a no brainer for any incoming Government.

Through all this political chaos, the Chamber will be trying to keep business updated via the blog on key moments and campaigns, as well as supporting Brexit preparations.
You can view the Chamber Brexit Hub here: https://www.neechamber.co.uk/preparing-for-brexit

If you want to get in touch, please contact: jack.simpson@neechamber.co.uk