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Another Brexit Deadline
After PM Johnson secured an 80 seat majority in Parliament, the UK is set to leave the EU by January 31st 2020. This brings another Brexit deadline into play, the transition period, which will end on December 31st 2020. PM Johnson will introduce a bill, widely expected to pass, which will make an extension of the transition period illegal. This could lead to a no-deal Brexit in just over twelve months. During the transition period, the UK is still under the EU framework without representation in Brussels. After the transition period, the UK is free to chart its course.
Pressure on EU to Reach Deal
The move by PM Johnson has more of a symbolic significance as he has the majority to extend the deadline if needed. The EU ruled out that the time given is enough to reach a Canada-type trade deal with the UK. Both sides are expected to fight hard, blaming each other for failed negotiations. The EU needs to be aware that they now deal with a UK Brexit government that enjoys a healthy majority, Brussels has played the delay game and hoped to sway negotiations in their favor.
With an empowered Brexit government in place, the situation now looks different and the EU is forced to change its tactics. PM Johnson’s first focus is to draft a law and deliver Brexit before Christmas. Many voters abandoned the opposition Labour party and united behind Johnson’s Tories, on the back of a promise to deliver Brexit and allow the country to move forward. With the majority in Parliament and a bigger proportion of the UK public on board with Brexit, the pressure remains in the EU to reach a deal.
British Pound Drops on Transition Period Deadline
The British Pound dropped after reports noted PM Johnson’s intention to set a hard deadline for the transition period. Malcolm Barr, economist at JPM, noted that “As much as we anticipated that the possibility of extending the transition period would be removed from UK law, it comes as something of a surprise to us that Johnson appears to have done this entirely voluntarily, rather than as a result of pressure from amendments proposed by the ERG as the legislation came to the Commons. The signal of intent on his part is, in our view, very clear.” The UK has confirmed that a deal with the EU remains the primary objective, during the time given.
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Johnson Boycotts Davos, NHS in Focus
After PM Johnson plans to sever ties with the EU, deal or no deal, following the end of the transition period, he also decided to boycott the World Economic Forum in Davos next month. One official stated that “our focus is on delivering for the people, not champagne with billionaires.” Johnson shows commitment to deliver on campaign promises and has repeated that many new voters “lend” their vote to his Tories.
Later today, Johnson will host a reception for nurses and will introduce an £8,000 per year grant for student nurses. The NHS is understaffed and Health Secretary Matt Hancock vowed to recruit 50,000 nurses in England alone. He added that “If you want a rewarding career in nursing, which is an incredibly rewarding profession, then you can get going now, knowing that that financial support will be there. It's about encouraging more people to go into nursing, the number of nurses has risen by 5,000 in the last year, that's good, but it's not but its not fast enough and we need more nurses.”
PM Johnson noted that “I have heard loud and clear that the priority of the British people is to focus on the NHS – and to make sure this treasured institution has everything it needs to deliver world-class care. There can be no doubting our commitment to the NHS and over the coming months we will bring forward further proposals to transform this great country.” £5,000 per year will be available for all student nurses plus £3,000 for distinct specialties like mental health.
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