Brexit Secretary David Davis and Foreign Secretary Boris Johnson stepped down within 24 hours of each other. Their exits cloud the already-muddy future of the UK's separation from the EU.
It’s been a turbulent 24 hours in Brexit news. Given the unanswered questions and high stakes surrounding the UK’s separation from the EU, that’s saying something.
On the evening of Sunday, July 8, Brexit Secretary David Davis announced his resignation, saying Prime Minster Theresa May has “given too much away, too easily” in trade negotiations with the EU. May quickly announced Dominic Raab as Davis’ replacement, but Davis’ resignation generated front-pgae headlines nonetheless; Davis was one of the earliest and loudest voices in support of Brexit, and until now had been a staunch supporter of May.
Then, on Monday, July 9, Foreign Secretary Boris Johnson resigned his post. Johnson’s relationship with May had been thought to be strained and so may not have been as much of a surprise to some. Coming on the heels of Davis’ resignation, however, made it obvious May’s administration had suffered a one-two punch.
“The two resignations leave May badly exposed at the top of a government unable to unite over Britain’s biggest foreign and trading policy shift in almost half a decade,” Reuters reporters Elizabeth Piper and William James wrote in their coverage of Johnson’s departure.
Davis’ and Johnson’s resignations and discord at the top of UK politics is likely to exacerbate existing fears of:
A business doldrums
The Spring 2018 Thomson Reuters CFO Brexit Survey, which polled CFOs at EU and UK companies with between US$1 million and US$5 billion, found that 37 percent of respondents have held off from investing in the UK. While nine percent said they anticipated increasing the number of staff in the UK, 51 percent said they foresaw no change in staff levels and 27 percent said they were anticipating a decrease. Additionally, 22 percent of respondents said they were “investigating moving functions out of the UK.”
A London brain drain
At a recent Thomson Reuters Legal Debate in London, former Chancellor of the Exchequer David Clarke expressed concern that trade and commerce disruption between the EU and UK would result in talent leaving London for the EU, thus imperiling the city’s status as a powerhouse of global commerce.
“I think that probably one of the casualties is going to be a brain drain from (London),” he said. “It depends how isolationist, how nationalist we go, and whether we succeed in avoiding – what is the real risk – winding up with just erecting a whole new set of trade barriers, through tariffs, new customs procedures, new regulatory divergence, with closed borders again between ourselves and our principle market, and our nearest major markets.”
“I have never seen such a mad situation in British politics,” he added.
In both the EU and UK, professional organizations are struggling with how to most appropriately respond to Brexit. What once was a bloc of countries led by politicians interested in promoting the cross-border exchange of goods, services and ideas has become something much more akin to a minefield. For example, Ken Murphy, director general of the Irish Law Society, told Forum magazine lawyers that British and Welsh lawyers have been rushing to register in Ireland in anticipation of Brexit impacting their ability to practice there.
“Having been 50 or fewer solicitors transferring a year, we received more than 800 in 2016,” he said.