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September 02, 2019

Prorogation already served its purpose - events will come to a head this week

Yesterday’s meeting at Chequers between Boris Johnson and his parliamentary whips may have been the decisive moment in the Brexit saga. They decided to withdraw the party whip from any Tory MP who votes with the opposition on a motion to take control of the House of Common’s order papers. If the vote passes, MPs could bring emergency legislation on no-deal Brexit this week. We expect the order paper vote to take place tomorrow. This is a necessary technical precursor for the emergency legislation to be discussed and voted on. 

The decision at Chequers opens up two basic scenarios. The first - if the motion succeeds despite the threat - is a mid-October general election. The number of Tory Brexit rebels is around 20. We noted a tweet from Alex Wickham of Buzzfeed last night that two Tory MPs he spoke to had already folded. There are a few who definitely won’t - those who will not stand for re-election and those who are ready to sacrifice their political careers. But we are expecting at least some MPs to ask themselves whether it is really worth sacrificing their career for a very uncertain gain: Johnson might still win either way.

Johnson’s confidence that he can win an election is the real game changer - not prorogation. We also note that Tony Blair is advising Jeremy Corbyn not to trigger an election for the same reason. But we don’t expect the Labour Party to refuse a pre-Brexit election if Johnson were to offer it, especially since Corbyn has been asking for one.

It is hard to predict how the vote will go. It is important that Johnson’s threat relates to the first vote - on the order papers. Withdrawing the whip and deselecting a candidate are the prime minister’s ultimate sanctions. Johnson does not need all 20 rebels to fold, but only a majority of them. There are also a few Labour MPs who will not vote for legislation to extend Brexit. The betting among journalists is that the vote to take temporary control of the order papers will succeed narrowly. We keep an open mind. If the vote goes against the government, we would expect Johnson to make an immediate move on elections.

If parliament voted against the motion, the second scenario sets in: the House of Commons will then lack the time to pass legislation before the prorogation of parliament, scheduled to start Sep 9-12 and lasting until mid-October. Johnson would have a clear path towards wither a no-deal Brexit or securing a deal. His argument has been that the permanent efforts by parliament to extend the deadline have hardened the position of the EU. We think this is true. Judging by recent remarks by Angela Merkel, the EU may agree to substantive negotiations but not until the last moment. The EU will, of course, not drop the backstop. It won’t be as crude as that. But EU diplomacy is not as rigid as the rallying calls by various officials suggest.

Both scenarios render the controversial prorogation of parliament somewhat irrelevant. If there are elections, parliament is suspended in any case. If MPs vote against the change in the order papers, there would not be enough time to pass legislation even if parliament continued to sit normally. The main purpose of prorogation was to force the hand of the rebels. If they deliver their coup this week, Johnson has time to call elections. If not, he will have his way. In this sense, it would not matter a lot even if the courts were to stop or restrict prorogation. It will have already served its main purpose.

Also superseded now is the scenario of a no-confidence vote with an election on November 1. That scenario would have required the following sequence: order paper move fails; Corbyn calls, and wins, vote of no-confidence; parliament fails to secure alternative prime minister; Johnson chooses post-Brexit election date, preceded by a no-deal Brexit. That scenario already breaks down at the second step: if there is no majority for a change in the order papers, then surely there is no majority for a vote of no-confidence. 

This leaves us with relatively straight set of scenarios for now: mid-October elections if tomorrow’s order-paper vote succeeds; or Johnson taking charge of the final stretch, unimpeded by parliament. They both might lead to the same result, a no-deal Brexit or a last-minute deal.

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September 02, 2019

EU citizens in the UK are the biggest victims of no-deal Brexit

There are many reasons to think that a no-deal Brexit is irresponsible. Most of the chaos will, however, be dealt with after a few weeks or months. But there will be some lasting effects. One of most-affected groups is EU citizens in the UK - and we presume some UK citizens in other EU countries too. Overtly, the UK government made what appeared to be a generous offer to all EU citizens, by allowing them to stay. But this only applies to those who succeed with their applications for so-called settled status. Settled status is a new thing. Previously, applicants needed to go through difficult and expensive application procedures to obtain permanent residence, and later UK citizenship. Settled status was supposed to make the process cheaper and less bureaucratic. This is why millions of EU citizens postponed their permanent residence applications, and waited for the new system to go online, which happened earlier this year. 

The trouble is, as the Guardian reports, that the rejection rate for settled status is much higher than previously projected. It was around 42% during July. This is a staggering number. If this is the average pass rate, around 1.5m EU citizens may not be recognised as resident, and may eventually be asked to leave the country. The withdrawal agreement also foresaw this scheme, but it gave the ECJ a role in supervising the transitional regimes. In a no-deal Brexit, this will not be the case.

We don’t anticipate large-scale deportations. More likely, Brexit will end disrupting lives and livelihoods, and will encourage people to leave the country if they suffered prolonged uncertainty - which is likely to be the case for most of those whose application are rejected. 

Most of the financial damage of a no-deal Brexit will be of a transitory nature - therefore, in the long run, economically not relevant. But the impact on EU citizens will be large and permanent.

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