Three and a half years after the Referendum, Brexit is now a certainty with the Conservatives currently in government with a significant majority.
During the NBCC Post-Election Breakfast, experts were given the opportunity to offer a first analysis on what the GE result means for UK politics, Brexit and UK-NL business.
Titia Ketelaar, political correspondent at NRC, started the meeting by explaining the election results and why people voted the way they did. She showed on the map that Labour lost many seats to the Conservatives. This was partly because this GE centred much more around personality: Boris vs Corbyn, and the impact of anti-Corbyn sentiment, but also because Labour had a confusing message about Brexit.
Titia highlighted the clear yellow (SNP) versus blue (Conservatives) division of the UK: showing the country's division over Brexit, and that English and Scottish nationalism won. She said pressures on UK unity will pile up due to several factors: in Northern Ireland the call for a border poll will increase, and Scottish nationalists will redouble their efforts to gain independence. Prime minister Johnson will have to deal with the question of the Union too.
If you would like to know more about the reasons England voted Brexit, and why England is the way it is - read her book Mind the Gap.
Rem Korteweg, Head of “Europe in the World” at Clingendael, subsequently explained where we go from there. He said this result has provided clarity that Johnson’s government will move quickly to “get Brexit done.” Rem expects PM to introduce legislation before the end of the year to take Britain out of the EU by January 31. He explained that the negotiating hand Boris now has is much stronger, and thinks the priorities in the negotiations will be around fishing laws, data and security.
Bert Colijn, Senior Economist at ING, explained what the results mean for the UK economy. He said that despite the clarity of the GE result, Brexit uncertainty is now going to make a comeback. 2020 will not be fantastic in terms of the UK economy (investment) due to this uncertainty on what kind of Brexit we will get and whether a cliff edge can be avoided.
He explained that contrary to what you would expect from the Tories, focus on fiscal spending limits free trade.
Bert predicts that even if fiscal spending is increased, uncertainty will limit the growth of the UK economy in 2020.
Finally, Leon Kanters, Tax partner and Brexit expert at KPMG Meijburg, explained that businesses welcomed the certainty that the UK election brought - it was clear that Brexit was going to happen by 31 January 2020. But, equally, that that certainty was short-lived, given the recognition that 11 months for a trade deal was impossibly short. He stated that companies can now prepare for the most likely scenario FTA. If the negotiations fail there is still the threat of a no deal. All other scenarios are almost certainly off the table.
Leon expects that the PM is currently committed to achieving a Canada-style FTA. If the UK were also to start similar talks with the US it would not surprise him if the UK diverges from EU trade rules. As a result, business will face customs formalities in the future. This goes hand in hand with a FTA-style agreement.
Leon expects that within 11 months only highline regulations can be set up or a very thin FTA. If the UK can't get a deal in 11 months, that means another cliff edge, or more likely an extension. The average large trade deal takes 5-7 years. Accomplishing this during the transition phase of almost 3 years would be a big achievement. In certain sectors such as agriculture, automotive and retail it will be inevitable to adjust current business models especially where just-in-time deliveries are relied on.
We would like to thank our speakers for sharing their analysis with our members so quickly after the Election Results, and the Toussaint House, for their great venue where the first female writer Mrs Toussaint used to work.
We would also like to thank our strategic partner KPMG Meijurg & Co for co-hosting this event.
We look forward to welcoming you in the new year at one of our upcoming events.
On behalf of the NBCC, I wish you a merry Christmas and a happy New Year!