A snap election could damage Boris Johnson’s party, or even see the UK break apart


VIDEO2:4202:42UK lawmakers to vote on bill to prevent a no-deal BrexitSquawk Box

British Prime Minister Boris Johnson will ask parliament to approve a new general election Wednesday evening, after a majority of lawmakers in the House of Commons voted to wrest control of the legislative timetable away from his Conservative-led government.

Johnson had lost his governing majority Tuesday when one of his party's disgruntled members defected to the opposition party, the Liberal Democrats.

A crucial vote Tuesday night meant opposition lawmakers together with a small number of Johnson's fellow Conservatives could introduce a piece of fresh legislation Wednesday afternoon to block the government from pursuing an exit from the European Union without a negotiated withdrawal settlement at the end of October.

Johnson has argued that this threat of a "no-deal Brexit" is necessary for him to win a compromise in negotiations with the EU, because of the expectation of economic damage that it would inflict on Europe.

And he has insisted that if the legislation to block what his opponents call a "disorderly" Brexit passes on Wednesday, only an election will help decide, in Johnson's words, "who goes to Brussels to sort this out," at the next summit of European leaders scheduled for mid-October.

The order paper for the House of Commons, the lower chamber in the British parliament, includes a proposal from Johnson that calls for "early general election." That too will face a vote on Wednesday evening, but only after that earlier vote on the legislation to block a no deal.

VIDEO5:1105:11There will be no consent for early election: Lord AdonisCapital Connection

And this sequence of events may reflect a real-world chronology if opposition lawmakers get their way. Labour leader Jeremy Corbyn said last night that the government will have to wait for the final passage of the legislation introduced on Wednesday before Labour — as the largest opposition party — would assent to a fresh election.

"Get the bill through first, in order to take no deal off the table," he thundered at a tired-looking Johnson last night.

Under current electoral rules the prime minister cannot trigger an election on his own, since he lacks a parliamentary majority. But that did not stop Johnson taunting Corbyn over his hesitation to automatically embark on an electoral campaign.

"The leader of the opposition has been begging for an election for years," he responded.

One way that Labour's Corbyn hopes to hold on to his party's core voters, who are in favor of continued European Union membership, is to offer the public a second referendum — an assurance repeated Tuesday night in parliament.

On Wednesday morning, Keir Starmer, the Labour party's spokesperson on Brexit, said his party would not be "dancing to Boris Johnson's tune" when it comes to the timing of a fresh national vote.

"We're going to complete the job in hand, we're going to insure our country against leaving the EU without a deal," he told Sky News. "Then, of course, a general election."

Analysts say this situation is unprecedented in recent British history.

"This would typically result in an election. But these are not normal times," said Richard Mylles, a political analyst at Absolute Strategy Research, in a note to CNBC.

He said opposition lawmakers do not trust Johnson and his advisors to set an election date "in good faith." The decision over specific electoral timing would ultimately rest with Downing Street, and critics have expressed concern that a date close to or after October 31 — the current deadline for Brexit — could potentially result in an "accidental" no-deal scenario.

One possible date for a national ballot is October 15, just days before that high-level gathering in Brussels, but there is huge uncertainty over what it would bring in Britain's fractious political environment.

"It's very hard to read the political tea leaves," acknowledged Tom Brake, Liberal Democrats' spokesperson on Brexit, in an interview with CNBC.

VIDEO5:4205:42Boris Johnson challenges opposition to accept election on October 15Squawk Box Europe

Brake's party has been strongly in favor of a second referendum on EU membership, and would campaign for the U.K. to remain inside the world's largest trading bloc. This stance helped attract new voters in European parliamentary elections earlier this year, and his party is currently polling at 18% as of Tuesday, according to Politico's poll of polls.

Johnson's Conservatives meanwhile lost support in that same European election, to the single-issue Brexit Party, and currently enjoys support from 34% of potential voters in national polls.

If the U.K. has not left the EU before the next national election, many expect those numbers for the Conservatives to remain below the 50% mark required for a majority, despite Johnson's widely-praised skills as a campaigner.

"If he doesn't manage to get the Brexit Party on board, perhaps get them to stand down in that election, then he has a difficulty," said Brake. "That ends up splitting the Brexit vote between the Conservatives and the Brexit Party."

At the other side of the same Brexit coin, in Scotland, where almost two thirds of voters chose to remain in Europe during the 2016 plebiscite, the Conservatives' few remaining lawmakers face a separate threat from a population where many would prefer Scotland to remain an EU member.

"We've seen that more and more people are looking now to a future where Scotland gets a choice about whether or not it can become an independent country and take its full seat in Europe as an equal member," said Drew Hendry, a member of the pro-independence Scottish National Party, currently the third largest political party across the U.K.

"I have no doubt that we will increase our support dramatically and I think the Tories (Conservatives) are in for a really, really shocking result."

Ratings agency DBRS agreed with that assessment in a recent research note, and said Scottish independence was now the most likely reason the U.K. could break apart.

"In the event that the U.K. leaves the EU, DBRS expects that calls for Scottish independence would become even louder, especially in a no-deal scenario."

VIDEO5:1405:14Where did Brexit come from?CNBC Reports


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