Apparel Sourcing Intelligence - Worldwide

April’s new-found pragmatism drives May to June election

On April 18, Britain’s Prime Minster, Theresa May, called a general election for June 8.

Throughout March and April, the British government had begunn grasping the sheer scale of the problems it has to solve to leave if it wants an EU exit at the end of March 2019.

  • First the divorce settlement Its EU partners made it clear that full negotiations on future relations would not start until there was agreement on a divorce payout. The EU’s pushing for €60 bn ($64 bn)
  • Border friction. Prime Minister Theresa May had earlier announced she wanted the UK to leave the EU’s Customs Union and the Single Market at the same time as it left the EU. During March and April, it became increasingly clear the UK was in real danger of not having adequate border facilities, trained staff, Customs processing capacity, or capability for regulatory conformance checking to operate the borders with the EU that would have to be established by April 1, 2019
  • Britain hosts – and employs – about 3 million migrants from other EU countries, while about a million (mostly retired) Britons live elsewhere in the EU. It seems impossible to keep the UK economy going without continuing to employ most of these 3 million
  • Other arrangements. Britain cannot begin negotiating new trade deals till it has left the EU. It is unlikely to be able to move the tens of thousands of regulations and judicial processes established while in the EU into UK law in just two years.

The UK government’s preferred solution, parts of which leaked throughout most of March and April, appears to be to leave the EU almost only in name on March 31 2019, and to retain some kind of transitional relationship for some time thereafter.

Dream or nightmare?

Properly handled, such a process would ease many of the fears expressed about Brexit within our industry. It would enable borders to remain open until adequate software had been fully tested, UK apparel factories to retain their EU workers – and possibly, UK importers to retain duty-free access to fast-fashion manufactures in Eastern Europe and Turkey

Unless such an arrangement is adopted, the nightmare for the UK government was to hit all the real problems of leaving the EU in 2019 (including a formidable departure tax), have none of the benefits of access to other markets for some years – and then find itself electorally destroyed during the planned 2020 election by anger at the botched Brexit management.

A surprising outburst of multipartisanship

So Mrs May’s proposed solution produced the single most surprising event in the English-speaking world for the past two years. She decided to call an election three years before the next one was due: for which, under UK law, she needed a two-thirds majority of what is probably the most bitterly divided Parliament I can remember in my lifetime.

The proposal was passed 522-13. The election is on June 8

Her party wants to go through the negotiations and transitional period without an immediate election: her opponents want to give her a hard time in the campaign.

Next up: elections

A set of UK local elections were already planned for May 4. Their outcome will offer an unusual rehearsal of public opinion for the June national election.