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Government Affairs

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Prime Minister Theresa May Resigns, Adding to Brexit Chaos

Theresa May, Prime Minister of the United Kingdom (UK) since 2016, announced today that she will be resigning from her post. May’s resignation comes after repeated failures to reach a deal on Brexit. Earlier this week, May made a final attempt to sell her Brexit proposal, including an option for another referendum, but still did not gain the additional support needed to get a deal approved. 

May will resign as leader of the Conservative Party on June 7, 2019 but will remain as Prime Minister until the party selects a new leader, a process that could take up to six weeks. If more than two candidates enter the race (which seems likely, as several Conservative leaders are expected to step forward), Conservative members of parliament will narrow the field to two candidates. These candidates will then be voted on by Conservative Party members. A successor is not likely to be in place until July. 

How This Impacts Mobility

The next leader selected by the Conservatives will be extremely important to the future of mobility.  Many of the potential candidates are well known for their hardline stance on Brexit and could be much more willing to accept a no-deal Brexit. A no-deal Brexit could end UK citizens’ right to free movement in the EU immediately, and possibly require UK nationals in the EUand vice versato apply for work permits. Leaving the EU without a deal would disrupt supply chains, lead to delays in the movement of goods and services in and out of the UK, and create even more uncertainty for the mobility industry. 

A no-deal Brexit would also mean that there would be no transition period to ease the UK’s exit from the EU. Most companies had been planning on using this transition period to maintain stability while the UK and EU worked to define their future relationship. Having no transition period would be extremely challenging for the mobility industry, which would have no time to adjust to massive changes in immigration processes. The growing likelihood of a no-deal Brexit makes it even more important for companies to know where their employees are located and what their immigration status is. 

Foreign companies that currently have their European operations solely in the UK are already looking to diversify into other European cities within EU member states. Companies that hope to establish a presence in Europe are considering that the UK will likely not be part of the EU before making business decisions. If the Conservatives elect a leader who appears willing to accept a no-deal Brexit, companies may look to move more employees from the UK to elsewhere in the EU to try and minimize the disruption to their businesses. The mobility industry will likely increased mobility in Europe for years to come. 

The individual who succeeds May will be the new lead negotiator for the UK on Brexit. This outcome will be critical to watch for the substantial impact on the mobility industry. Worldwide ERC® will be monitoring and reporting updates as this leadership scenario unfolds. 

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