26 Jul

ABCC Brexit Update - 26 July - A week of Leadership Change - “A New Golden Age”

  • The Rt Hon Boris Johnson has become Prime Minister of the United Kingdom and Northern Ireland
  • This follows his appointment as Leader of the Conservative Party on Tuesday after a vote which he won 66% of the Members’, defeating the Rt Hon Jeremy Hunt
  • In his maiden speech as Prime Minister to the House of Commons he outlined a plan for negotiation with the EU, whilst preparing for a no deal exit on the 31st of October
  • Jean-Claude Junker, President of the EU, responded to Prime Minister’s view to scrap the Irish Backstop by reiterating that the Withdrawal Agreement is the “best and only agreement possible”
  • Michel Barnier, European Chief Negotiator for the UK, wrote to EU leaders to advise them to continue to hold the line, “what remains essential on our side is to remain calm, stick to our principles and guidelines and show solidarity and unity of the 27” and that removing the backstop was “unacceptable”
  • Theresa May held her final Press conference as Prime Minister on Wednesday, saying she will continue to serve “in the National Interest” from the back bench and that serving as “Prime Minister of the United Kingdom is the greatest honour”
  • Cabinet Appointments were made with a strongly pro-Brexit theme. 18 Cabinet Ministers have either resigned or been sacked by the incoming PM
  • Vote Leave Campaign Director Dominic Cummings will enter Number 10 as key advisor to the PM, along with former SKY CFO Andrew Griffiths as Business Advisor
  • The Rt Hon Michael Gove will lead the Cabinet Office and on Brexit
  • The Rt Hon Elizabeth (Liz) Truss was appointed as new Secretary of State of International Trade
  • The Rt Hon Sajid Javid takes over from Phillip Hammond as Chancellor of the Exchequer
  • Liberal Democrats elected a new Leader, with Jo Swinson defeating Sir Ed Davey
     

In a week of heightened political activity in the UK, The Rt Hon Boris Johnson MP was asked by the Queen to become Prime Minister and form a new Government.

The PM Process

Following a process which began on the 24th of May when Prime Minister Theresa May announced she would stand down as Conservative leader and Prime Minister, the Conservative Party concluded their leadership election.

After the Party room voted to narrow the field to two in June, Jeremy Hunt and Boris Johnson, the Party then conducted a poll of their 159,320 Members of which 139,318 returned a vote.

On Tuesday morning (UK time) Boris Johnson MP was announced as the winner of the Conservative Party leadership election.

Boris Johnson defeated the Rt Hon Jeremy Hunt then Secretary of State for the Foreign and Commonwealth Affairs by 92,153 (66.1%) votes to 46,656 votes.

Farewell to Theresa May

On Wednesday Prime Minister Theresa May bid farewell to the UK Parliament at her last Prime Minister’s Questions before returning to Number 10 for the last time as Prime Minister.

Upon departing Number 10, Theresa May noted that she would continue to serve the constituents of Maidenhead and “in the National Interest”.

“To serve as Prime Minister of the United Kingdom is the greatest honour.”

Getting on with the Job

As the newly appointed Prime Minister arrived back at Downing Street, he made his first speech as Prime Minister on the street outside Number 10.

His speech addressed his pledge to get Brexit done. “We are going to fulfil the repeated promises of Parliament to the people and come out of the EU on October 31 - no ifs or buts,”

He also addressed many domestic issues, including a raft of new spending measures. These included 20,000 new police, upgrades to 20 hospitals and ensuring that money reaches the frontline of the NHS, as well as ensuring education funding is more equally apportioned across the country in primary and secondary schooling.

Following this speech, he has named the following to be appointed to the Cabinet and the Ministry (list correct as of Friday evening Australian Time- we will publish a full list next week): -

Prime Minister - Boris Johnson

Chancellor  - Sajid Javid

Home Secretary - Priti Patel

Foreign Secretary - Dominic Raab

Attorney General - Geoffrey Cox QC*

Brexit Secretar - Stephen Barclay

Chancellor of the Duchy of Lancaster - Michael Gove

Defence Secretary - Ben Wallace

International Trade - Liz Truss

Health and Social Care - Matt Hancock

Environment Secretary - Theresa Villiers

Education Secretary - Gavin Williamson

Culture Secretary - Nicky Morgan

Business Secretary - Andrea Leadsom

Housing & Communities Secretary - Robert Jenrick

Work & Pensions, Women & Equalities - Amber Rudd

Justice Secretary - Robert Buckland

International Development Secretary - Alok Sharma

Transport Secretary - Grant Shapps

Welsh Secretary - Alun Cairns

Scottish Secretary - Alister Jack

Northern Ireland Secretary - Julian Smith

Leader of the Commons - Jacob Rees-Mogg*

Leader of Lords - Baroness Evans

Chief Whip - Mark Spencer*

Chief Secretary to the Treasury - Rishi Sunak*

Minister without Portfolio - James Cleverly

Party Chairman

Minister for Housing, Communities, and Local Government - Ester McVey*

Minister for Home Affairs - Brandon Lewis*

Minister for Business, Energy, Industrial Strategy and Education - Jo Johnson*

Paymaster General - Oliver Dowden*

* These are Members of the Government that may attend but are not full Members of Cabinet

Six Members of the Cabinet have maintained their roles, nine former Cabinet Members have returned having served in previous Cabinets and 13 are new to the Cabinet.

The Cabinet held their first meeting on Thursday morning. Cabinet ministers have committed to the UK departing the EU on or before 31 October “no ifs, no buts”.

New Team in Number 10

Along with these appointments the Prime Minister has also appointed some new staff for Number 10. Dominic Cummings, widely known for his role as the Campaign Director of the “Vote Leave” campaign in the lead up to the 2016 Referendum, will be a key advisor to the PM.

The appointment of Cummings, as well as some of the key Brexit voices from the Party into the Ministry suggests that his rhetoric on leaving on the 31st of October, with or without a deal, should not be taken lightly.

He has also appointed Andrew Griffiths, former CFO of Sky in the UK as his Business Advisor.

First Statement to the House of Commons

On Friday Prime Minister Johnson made his first Statement to the House of Commons as Prime Minister. He promised that the UK would find itself at the dawn of a “new Golden Age”.

In his statement, the Prime Minister indicated that preparing for “no deal” would be a top priority, although he indicated that he hoped the EU would negotiate an improved deal.

He gave assurances that EU citizens would have their rights protected, and outlined that his Government would pursue an “Australian style points-based system” for the future immigration policy.

Mr Johnson also renewed his pledge to remove the Irish Backstop from any Withdrawal Agreement, indicating that he believed that other forms of checks conducted away from the border, trusted trader schemes and other tools would be able to manage this process without any physical checks at the border.

The EU reaction to Prime Minister Johnson

Whilst congratulatory messages were the order of the day on Wednesday, by Thursday afternoon the EU tone had become clear that their position was unlikely to change.

According to reports of a call between EU Commission President Jean-Claude Juncker and the Prime Minister, Juncker said that the Withdrawal Agreement is the “best and only agreement possible”.

Michel Barnier, Chief Negotiator for the EU has written to EU leaders to advise them to continue to hold the line, “what remains essential on our side is to remain calm, stick to our principles and guidelines and show solidarity and unity of the 27” and that removing the backstop was “unacceptable”. He also noted that the tone of Prime Minister Johnson’s comments were “rather combative”.

Irish Prime Minister Leo Varadkar said "without the backstop there is no withdrawal agreement, there's no transition phase, there's no implementation phase, and there will be no free trade agreement until all those matters are resolved".

Liberal Democrats elect new leader as Sir Vince Cable steps down

On Monday, Jo Swinson MP won the Liberal Democrats leadership election, announced on Monday 22 July 2019.

Jo Swinson defeated rival leadership contender Sir Ed Davey by 47,997 (62.8%) votes to 28,021 from a turnout of 72% of Party Members.

The Clock is Ticking:

The UK is due to leave the European Union on the 31st of October, which means there are 97 days until Brexit. The Parliament has now risen for the summer recess.

 

The Australian reaction to Prime Minister Johnson’s Appointment:
 
Prime Minister Scott Morrison
Prime Minister Morrison vowed on Thursday that Australia would be "one of the first cabs off the rank" in working toward a trade deal with new British Prime Minister Boris Johnson.

Mr Morrison said he had spoken to the Tory leader to congratulate him and had committed to continuing the two countries' "very strong relationship". Mr Morrison vowed to move "very quickly, when the opportunity presents" on an "agreement between the United Kingdom and Australia on trade".
 
Vicki Treadell, British High Commissioner to Australia
"I'm not going to comment on whether or not he's a wildcard – people will have their opinion. What I can say is when I've spoken to contacts [in Australia] who met him when he visited as foreign secretary last year, that he was received extremely well and he had a very positive impact."
 
Foreign Minister Marise Payne
“Brexit, though a matter for the UK government, is an opportunity for our two countries to reinvigorate our already strong economic partnership and we will be ready to launch negotiations on an FTA as soon as it is possible for the UK post-Brexit,” she said. “Despite the uncertainty surrounding Brexit, Australians can be assured we have been preparing for all eventualities, including a ‘no-deal’.”
 
Trade Minister Simon Birmingham
“The UK, technically, is not able to negotiate new trade agreements with other countries until they actually terminate their Customs union with the EU,” he said.
“But we would move as swiftly as we can. We already put in place a trade working group between Australia and the UK to explore possibilities. And that will put us in a position where, if the UK wanted to get the deal done in a period of months, maybe even weeks, well, we would be willing to move as swiftly as they were able to.”
 
Former Foreign Minister Julie Bishop
“I developed a good working relationship with him over many years. I have seen him in action in forums around the world and it would be a huge mistake to underestimate him, as many critics do,” she said. “Boris Johnson has a close relationship with Australia for a British Prime Minister. He spent his gap year here, attending Geelong Grammar. He knows many Australian politicians and figures well. He gave a marvellous speech at Sydney Town Hall in 2017 where he talked about his love and affection for Australia.
“We are well-positioned to have an even stronger relationship with Britain. Post-Brexit there will be an enormous opportunity to increase trade relationships with Britain and logical and strategic ties more generally.”
 
"He is a strong supporter of the long-standing strategic partnership between the UK and Australia," Ms Bishop told The Australian Financial Review.
"He also values Australia’s perspective and insights as a nation of the Indo-Pacific and a member of the Commonwealth.
"Should Boris be successful in finalising Brexit, we can expect that increased trade and deeper strategic relations with Australia will be one his highest priorities."
 
Queensland Liberal Senator James McGrath
“He’s been to Australia quite a few times. He’s a friend of Australia. He’s Prime Minister now of our closest ally; it is good news for Australia.”

The ABCC and Brexit
 
The ABCC will continue to follow these developments closely. We look forward to keeping members up to date with the very latest from London and what it possibly means for the Australian-British business community.  Earlier ABCC Brexit updates can be found on the ABCC Blog.
 
If you would like to receive more frequent Brexit updates or have any questions, please feel free to contact our office on abcc@britishchamber.com.
 
By David McCredie
 
David is the CEO of the Australian British Chamber of Commerce and a recognised commentator on UK politics, Brexit and Australian UK relations.

Paul O’Hagan is away on leave.

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