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Lawyers react to shock general election result

Prime minister promises to provide ‘certainty’ after losing parliamentary majority, but does the profession believe her?

9 June 2017

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Following news of a hung parliament, legal professionals have been giving their takes on the big issues ahead, such as Brexit, the Conservative’s alliance with the DUP, the impact on justice policy and human rights, and the so-called ‘dementia tax’.

Robert Bell, partner at Bryan Cave

‘Apart from the inevitable uncertainty and difficulty of executing normal parliamentary business, the result of a hung parliament has plunged the Brexit negotiations with the European Union due to start on 19 June into disarray.

‘Mrs May was anxious to get her own mandate from the electorate to pursue her vision of Brexit. The referendum vote last year had delivered a verdict that the country wanted to leave the EU but did not elaborate upon what terms. So this was her opportunity to put flesh on the bones of her mantra “Brexit means Brexit”.

‘Despite all the tough talk about “strength and stability” and walking away from a bad deal if no advantageous terms were offered by the EU 27, this election has changed everything. Driving through a “hard Brexit” agenda is not going to win her the cross-party support in the House of Commons she will need to carry the day. Most MPs don’t back leaving the single European market and it only needs a few rebels to torpedo the government’s EU negotiating strategy.

‘So the government will need to really rethink its EU negotiating stance in light of this adverse election result and carry parliament with it. If it does not then it is only a matter of time before it has to go back to the polls or even dare I say it go back to the country for a second referendum on the UK’s membership of the European Union.’

 

Nicholas Evans, partner, parliamentary agent, and head of public law at Bircham Dyson Bell

‘Although we know we have a hung parliament, this doesn’t necessarily mean that we will have a coalition or a new prime minister. If Theresa May can persuade her party to keep her in place (and that’s a big if), she needs to persuade the DUP to support her government.

‘However, Brexit aside, the Tories and the DUP don’t have that much in common, and the DUP have their own recent bad experience with power-sharing in Northern Ireland, so Mrs May might seek to go it alone in a minority government.

‘In that case, she will prepare a Queen’s Speech, including as many measures as are needed to get support from the DUP and perhaps others, and dare the opposition parties (and her own less happy back-benchers) to vote it down. However, until it becomes clear that she cannot command the support of the House of Commons, she stays as prime minister.

‘Any change in government following the outcome of the election would unavoidably result in delays to the Brexit process. The negotiations have been scheduled to begin on 19 June. With a hung parliament, both the Lords and the Commons will expect to exert a greater influence over the Brexit process.

‘If a coalition government or some other looser arrangement is formed between the Conservatives and DUP, the Lords can legitimately argue that any measure not included in both parties’ manifestos is outside the scope of the Salisbury-Addison convention.

‘The lack of a majority in the Commons may also mean that the government has to compromise on more issues, potentially requiring it to allow parliament a greater role in the negotiation process.’

 

Dr Stuart Thomson, head of public affairs at Bircham Dyson Bell

‘We are in the territory of discussions, deliberation, and deals. What is clear is that no one, outside of Northern Ireland, wants to do a deal with the Conservatives.

There is though the chance of a progressive alliance coming together, not in a formal coalition, but at least on an issue-by-issue basis. More likely is that Labour tries to set itself up as an “alternative” government with parliament deciding who leads Britain. The first big test would come with the Queen’s Speech.

‘Such arrangements would not though be likely to prove stable. Anyone for another election in 2018?’

 

Barry Vitou, head of global corporate crime at Pinsent Masons

‘Theresa and her circle of advisers were behind the idea to shutter the SFO. Nobody has articulated a sound basis for the idea and her attempts while home secretary were foiled by cabinet colleagues.

‘With her authority now seriously dented it is unlikely that Theresa May’s pet plan for the SFO will now be carried through. The SFO is set to stay.

‘The SFO’s political independence is very important as it helps ensure that it will pursue cases even if that risks embarrassing the government or UK PLC. Operationally it is a much-improved outfit and a period of immense change and restructuring could jeopardise those improvements.

‘What the effort against white collar crime needs in the UK is proper funding not endless organisational change.’

 

Marcus Thompson, partner at Ropes & Gray

‘Any plans to merge the SFO into the NCA are now much less likely to materialise.

‘Plans for the future of the SFO will be very low down the list of priorities for whoever is in Downing Street in the next few months as they grapple with forming and running a coalition or minority government at the same time as embarking on detailed Brexit negotiations.’

 

Carol Hopper, real estate partner at Ropes & Gray

‘This result may well lead to a market correction, which could increase deal activity, as investors look to sell positions and opportunistic buyers selectively look to take advantage of that.’

 

Philip Hyland, principal at PJH Law

‘Employment law is a microcosm of both the economy and society. Currently there is an imbalance between capital and labour. The returns on capital are outsized in comparison to the returns on labour. Furthermore, there is an imbalance between the young and the old.

The young have a far worse deal. Theresa May was out of touch with this sentiment and her manifesto did little to recognise the imbalance let alone redress it. Jeremy Corbyn was in touch. A lot of his manifesto promises saw the need to even things up – removal of student fees and ET fees being two eye-catching ones.

‘Jeremy Corbyn came over as a decent, principled man willing to listen and do the right thing for the country. This result makes a hard Brexit less likely which can only be a good thing.’

 

Robert Meakin, partner at Clyde & Co

‘In addition to the broader implications for the country, a hung parliament could be the worst possible result for business. With the economy already struggling with the uncertainty of Brexit, the last thing we need is further confusion and delay in the government’s investment strategy.

‘The article 50 clock is also ticking and business will be eager to ensure that there is a clear and consistent voice at the negotiating table, so as to minimise further damage to the economy. The sooner a viable government is in place, however it’s composed, the better.’

 

Martha Spurrier, director of Liberty

‘So, there we have it – a new government. And make no mistake, the fight to put human rights at the heart of UK politics starts now. Liberty is, and always has been, totally independent. We don’t support any political party. Our members hold the powerful to account no matter who’s running the country. We are going to be needed now more than ever.

‘More of the same toxic policies that divide our communities and deny us our freedoms? Not on our watch. In recent years, politicians have exploited fear to make laws that divide, discriminate, and disregard our rights. But we have the power to put things right. Those politicians work for us.

‘Now our work begins. We’re going to make sure our rights aren’t going anywhere as we leave the EU. We’re going to dismantle racist policies that spread hate and divide our communities.

‘And we’re going to stop any attempt to scrap our human rights laws – the laws that keep us safe, keep us free, and help people every single day.’

 

Dawn Register, partner at BDO

'With the Conservative party likely to lead a government there will be no let-up for tax avoiders and evaders as the Tories are likely to continue to pursue this 'cash cow' to raise much needed funds for the Exchequer.

'We expect a number of proposals in the Finance Bill that were dropped in April, due to the lack of time for the Bill to be given parliamentary scrutiny, will be reignited. The most significant measures which needed longer debate and are likely to be promptly put back on the legislative book are Making Tax Digital (MTD) and the Requirement to Correct. Both are ground-breaking policies introduced by previous Tory government's, with MTD set to revolutionise the way advisers and taxpayers interact with HMRC. With manifesto promises to “go further” in its vigorous action against tax avoidance and evasion, there is little to suggest that this government will provide respite.

'What is clear is that the Common Reporting Standard will be a "game changer" in the fight against offshore tax evasion and money laundering; we expect it will also assist the wider government in tackling terrorism funding. This is the automatic exchange of financial data, without necessity for permission or knowledge of the account holder. Also an increased focus on identifying ultimate beneficial owners, anywhere in the world. 

'With offshore bank data flowing to HMRC from over 100 countries, unaffected by Brexit and the election, plus tough new penalties to follow, individuals concerned about their tax affairs should contact a specialist tax adviser as a matter of urgency.'

 

Chris Millward, chief executive of the Institute of Legacy Management

‘If the Conservatives are to form a minority or coalition government, we hope to see an urgent review of the so-called “dementia tax”.

‘This is an unpopular policy that could result in a significant financial burden on those needing long-term care, which will mean they are unable to use their assets as they wish – whether leaving them to their loved ones or the charitable causes they believe in.

‘We will watch carefully over the coming days and weeks as the new government forms and their plans become clear, and will continue to champion the interests of our members, and charities and their donors, to ensure that every gift achieves its greatest potential.’

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