Convincing Conservative win in UK means January Brexit near certain

Out-Law News | 13 Dec 2019 | 9:45 am | 4 min. read

The Conservative Party will form the next UK government after winning a large majority of seats that will allow the government to take the UK out of the EU on 31 January and implement its policies without relying on other parties.

The Conservatives have a majority of 76, the biggest for the party since 1987, following a significant swing from Labour to Conservative in areas that voted leave in 2016's EU referendum.

Brexit deadlines in March and October were extended and the next deadline is 31 January. There is now no impediment to exiting the EU on that date.

Prime minister Boris Johnson said the result had "smashed the roadblock" over Brexit. "We will get Brexit done on time by 31 January, no ifs, no buts, not maybe," he said.

But Brexit expert Clare Francis of Pinsent Masons, the law firm behind Out-Law, said that it is important not to underestimate the complexity involved in negotiating a future trade deal with the EU and the length of time this will take.  

“The Conservative Party’s success at the ballot box does not mean Boris Johnson can now ‘get Brexit done’ quickly," she said. "Far from it in fact. There are then just 11 months for the UK to agree a new trade deal with the EU before the expiry of the transition period."

“The timetable is exceptionally tight given the Conservative manifesto makes it clear that the party will not extend the implementation period beyond December 2020. Could this be reconsidered in light of their success? Agreeing a future trading relationship of this complexity may prove as difficult, if not more so, than the withdrawal negotiations which have dominated UK politics for the past three years," said Francis.

Labour lost 8% of its votes since the 2017 election and its 33% share was the lowest since Neil Kinnock was leader in 1992. Labour leader Jeremy Corbyn did not stand down but did say he would not be leader at the next election.

In Scotland the SNP won 13 more seats than in 2017, taking it to 48 of the 59 seats. Leader Nicola Sturgeon said that she will write to the UK government before Christmas asking it to permit a second independence referendum. Prime minister Boris Johnson has previously said that he would not grant that permission.

Conservative business policies that could now be enacted, outlined below, include investment in offshore wind energy and a strengthening of the corporate governance regime.

Energy

On energy, the Conservative manifesto pledged that in government the party would increase offshore wind capacity to 40GW by 2030; invest £800 million to build the first fully-deployed carbon capture storage cluster by the mid-2020s, and invest £500m to help energy-intensive industries move to low-carbon techniques, and support gas for hydrogen production and nuclear energy, including fusion, as important parts of the energy system.

It said it would not support fracking unless the science shows categorically that it can be done safely; would help lower energy bills by investing £9.2 billion in the energy efficiency of homes, schools and hospitals, and use the £1bn Ayrton fund to develop affordable and accessible energy;

It said a Conservative government would introduce an oil and gas sector deal for Scotland in the move towards a net-zero economy.

Financial services

The Conservative Party pledged in its manifesto to strengthen the UK’s corporate governance regime and reform insolvency rules and the audit regime so that customers and suppliers are better protected when firms go into administration.

It said it would introduce legislation that protects pension pots from being misused by irresponsible employers, introduces a pensions dashboard and creates a new style pension scheme.

It wants to maintain corporation tax at 19% and to introduce a start-up visa to ensure that the UK "can attract the entrepreneurs of the future".

Real estate

The Conservative manifesto contained a commitment to build one million new homes in the next five years and extend the right to buy for housing association tenants to more regions of the UK.

The party said it would offer more homes to local families, enabling councils to users developers contributions to discount homes by a third for local people, and extend the Help to Buy Scheme from 2021 to 2023.

It pledged to reform leaseholds including implementing ban on sale of new leasehold homes and introduce a 'better deal for renters', including abolishing ‘no fault’ evictions.

It said it would introduce a stamp duty surcharge on non-UK resident buyers to fund rough sleeping programmes and initiatives, and amend planning laws that ensure infrastructure is built before new homes, using a new £10bn single housing infrastructure fund.

Planning law expert Iain Gilbey of Pinsent Masons said: "If housing and infrastructure delivery momentum is to be built and maintained, the key policy decisions that will need to be made early in the term will include a social housing white paper, which will need to obviously embrace the government's new supporter base in the Midlands and the North; the accelerated planning green paper delayed from this autumn; and some meaningful commitments to funding, through HIF or other capital programmes, to join up new infrastructure with housing delivery".

"With a strong working majority, we might see some braver decision making on appeals - helping to generate more housing, more quickly - but the Conservatives' inherent love of green belt protection is unlikely to be watered down any time soon. Instead, we can expect to see a greater emphasis on good quality design, and perhaps a return to a more locally-led sustainability agenda," he said.

Housing expert David Meecham of Pinsent Masons said: “It will be intriguing to see if the government goes through with its commitment to extending the right to buy for housing association tenants. This is likely to raise concerns for housing associations already grappling with low stock. A balance will need to be struck between managing a roll out of right to buy and building new affordable homes to ensure social housing is safeguarded."

“A decisive result at the ballot box may unlock investment into the UK but there will be concerns about how 300,000 new homes can be built by the mid-2020s given the strain Brexit will have on the skilled workforce required to reach this target," he said.

Pinsent Masons housing expert Anne Bowden said that the government would need to increase the funds available if it was going to address the cladding crisis for high rise residential buildings. 

"Strong leadership and increased funds from central government will be critical in addressing the cladding crisis. As it stands current funding is not enough and only addresses one narrow point – the issue is much wider than just ACM cladding."
“Of course, this is about much more than cladding. The government needs to champion wholesale cultural change brought about by an ambitious new regulatory regime which has the power to hold those not complying to account," said Bowden.

Infrastructure

The Conservative manifesto said that there would be "an infrastructure revolution" if it formed the next government. It supports the Northern Powerhouse Rail project but will consider findings of the review into HS2 before deciding the optimal outcome and says that while the UK parliament voted in principle to support a third runway at Heathrow, it is a private sector project and it is for Heathrow to demonstrate that it can meet its air quality and noise obligations, that the project can be financed and built and that the business case is realistic.

The party said it would find £4bn of new funding for flood defences, electric vehicle infrastructure including a national plug-in network and gigafactory; and clean energy and would build Northern Powerhouse Rail between Leeds and Manchester before focusing on Liverpool, Tees Valley, Hull, Sheffield and Newcastle.

It pledged to provide city regions with the funding to upgrade their bus, tram and train services and spend an additional £100bn on infrastructure including £4bn for flood defences, £28.8bn in strategic and local roads, and £1bn in a fast charging network for electric vehicles.

Manufacturing and technology

Its manifesto said that the Conservative Party plans to make the UK a leading global hub for life sciences after Brexit and increase the tax credit rate to 13% and review the definition of R&D so that important investments in cloud computing and data, which boost productivity and innovation, are incentivised.

It plans to strengthen the Small Businesses Commissioner to tackle late payments by larger partners and reform the science funding system "to cut time wasted by scientists filling in forms".