General Election 2019: the aftermath

It has been a week of reckonings. As Labour and the Liberal Democrats embark on their leadership contests, with varying degrees of acrimony, there is a stack of first-time Members of Parliament who are coming to terms with the excitement of their new roles. In some cases the change of status is so unexpected, thanks to the sweep of the Conservative victory, that the individuals will have had rather hasty conversations with their (now previous) employers to explain why they won’t be back. A nice problem to have (unless you are the employer, of course).
The week has therefore been busy, with the formal taking of oaths by parliamentarians followed by the new legislative programme in the Queen’s Speech and the ‘Second Reading’ debate (covering the overall principles) of the Withdrawal Agreement Bill. MPs will be pathetically grateful to stumble home this weekend and recover from months of parliamentary attrition and weeks of campaigning, catch their breath, and re-acquaint themselves with loved ones, before the serious work begins again in the new year.
The Prime Minister, and his agents, have been quick to underline the intent to effect lasting change and to make things clear with a potentially dizzying level of activity. In an almost breathless manner, there have been tours across the north of England to underline the big election commitments on infrastructure and place a marker that Conservatives don’t want Labour re-building their ‘red wall’ any time soon. There have been briefings about a radical re-build of Whitehall (it sounds like much more than a re-wiring job), this intent reinforced by the announcement that the proper cabinet re-shuffle will only happen ‘when Brexit is done’ (by which is simply meant the formal departure on 31 January, not the hard grind which is to follow). And there have been very assertive briefings about the speed and nature of the negotiations with the EU on the future relationship at the end of the ‘implementation period’, or transition, this time next year.
On that latter point, for a couple of days after the Prime Minister secured his significant majority, thoughts swirled that this might free him from the commitment to leave the transition period on 31 December 2020. The argument, which I used myself, was that he would now be free of the constraints of the European Reform Group, the Conservatives most committed to a basic or ‘hard’ Brexit. Although the commitment was spelt out early on in his manifesto, the hope was that Mr Johnson could afford to be more pragmatic. Well, if that is to happen, it appears it will be very late in the day. All week we have heard repeated messages that there is no question of the UK seeking an extension. Accordingly, expectations of a tight, narrowly focused trade deal (if even that is possible in the time frame) have increased, not just here, but in the EU-27 too. If so, services could be a major casualty in this scenario. (In passing, to make a big point that they won’t be sidelined, the ERG have been recruiting heavily amongst the new intake of Conservative MPs).
The Queen’s Speech, and associated formal documents, listed 30 pieces of planned legislation, some of which will be in draft form, and other measures to address the Prime Minister’s agenda. There is a lot of Brexit-related legislation, aside from the ratification of the Withdrawal Bill itself, which will take a lot of effort in Parliament, not least in the House of Lords. Areas such as immigration will be highly sensitive and not necessarily straightforward, whatever the government majority. Planned legislation for financial services and on the national security aspects of M&A (this is promised in draft form initially) will be clear areas for scrutiny. And we will see how critical aspects of the government’s spending agenda are to be developed when the national infrastructure strategy is published and plans for devolution of spending around England are made clearer in the new year.
While all of this was happening, I spent much of the week on the Continent – visiting my counterparts in Paris, Berlin and Amsterdam. The ‘B’ word was discussed, of course. Encouragingly, there was widespread support for the UK’s ongoing role in European private equity discussions and a shared understanding that the interests of all our members will be best served by staying close to one another in the years ahead. That was a very positive note on which to end the year.
Thank you for your support to me over recent weeks as I have settled into my new role. All of us at the BVCA are grateful for your engagement – in the meantime I wish you a relaxing festive period and look forward to seeing you early in 2020!
Michael Moore
Director General, BVCA