What do the DExEU resignations mean for charities and Brexit?

You will probably have spotted that overnight the Brexit secretary David Davis has resigned from the government, alongside his fellow DExEU minister, Steve Baker. While Westminster awaits news of what happens next, I’ve had a quick look at some of the possibilities and what charities might need to do now.

Should we be preparing for an election?

It’s pretty unusual for a government to lose two ministers from a key department at midnight on a Sunday, and clearly more could happen throughout the day. I still think an election is unlikely – even if there is a majority of MPs who think we need a new government with a new prime minister, there also seems to be a majority of MPs who wouldn’t want to see the possibility of Jeremy Corbyn picking up the keys to Number 10.

Under the Fixed Term Parliaments Act you would need two thirds of MPs to immediately call an election, which is likely to be a high bar. If a quick election does happen, it’s more likely to do so through the second route, which would require a vote of no confidence followed by a failure to form a new government within 14 days – so for example, if an alternative Conservative prime minister was unable to agree a deal with the DUP.

Charities then probably don’t need to start writing manifestos yet, but given the uncertainty it might be worth thinking about what you need to put in place if the country is called to the polls. For example, having an idea of what your key asks would be, how you would go about putting things together, and who your key contacts in the parties would be.

And of course it’s worth thinking about what this would mean in terms of your campaigning activity and the Lobbying Act – updating the resources we provide to our members is pretty high on our list, but our advice from 2017 is worth looking at in the meantime.

A new prime minister?

More immediately it seems that any focus would fall on a challenge to the Prime Minister. If Graham Brady, chair of the Conservative 1922 committee, receives 48 letters from backbenchers stating that they no longer have confidence in the leader, then she would face a vote of all Conservative MPs where she would have to win a simple majority to stay on. We know that there are already a number of letters with Mr Brady (though not exactly how many), and crucially there are estimated to be as many as 80 MPs who are members of the Brexit-backing Conservative European Research Group (ERG), 62 of whom wrote to the Prime Minister in February calling on her to stick to the principles outlined in her 2017 Lancaster House speech. Crucially both Mr Baker is a former chair of the ERG and it is likely that this group will not support the deal agreed at Chequers.

The numbers are likely to be there then, if a challenge is initiated to call a vote of confidence. However, it has generally been suspected that Theresa May would then win among her parliamentary party, albeit with her authority weakened.

If in these circumstances she did lose, or decided to quit, there would then be a Conservative leadership contest. It is possible that the party could unite around a caretaker leader to guide the party through Brexit, but given the key split that has emerged over Brexit, a contested leadership election taking several months seems more likely, with either Theresa May staying on as Prime Minister, or an interim leader, most likely David Lidington.

So for charities, again it’s probably too early to make many concrete plans. Though as ever, looking to build relationships across different wings of parties and not just across traditional party lines, will be needed if charities are going to be in a position to influence policy effectively.

What does this mean for Brexit?

As time becomes increasingly important in the Brexit process, this is undoubtedly bad news for the government’s hopes to agree a deal on the current timetable.

There are now big doubts over whether the government can agree the approach outlined at Chequers with either the EU or parliament. It may be that ERG members would still vote for the government’s final deal when it comes before parliament, but if they stick to the line that no deal is better than a bad deal (abandoned in all but name by the Prime Minister herself), then it could still be voted down, with opposition parties almost certain to vote against it.

I would argue then, that the big takeaway from last night for charities, may be that no deal has just become a bit more likely. Which means that like some businesses are doing, it might be time to start thinking about what it would mean for you. The immediate impacts of no deal are likely to be felt most keenly by businesses in terms of uncertainty over trade, but for example if your charity needs specialist goods or equipment from overseas you should probably be making contingency plans.

Above all, charities will need to be monitoring the political environment very closely. As ever, we’ll be working closely with our members to understand what this all means for charities and the work they do. We know that changes in government can have a big impact at any time, but with Brexit on the horizon, any uncertainty could have massive implications.