by John McEldowney
On 23rd June 2016, the UK held a referendum on EU membership. The referendum question was “Should the United Kingdom remain a member of the European Union or leave the European Union? The answer surprised some, but delighted others, 51.9% wished to leave while 48.9% wished to remain. The turnout was 71%. Equally important is that the majority in London, Scotland and N. Ireland by a very large margin wanted to remain. The Prime Minister Mr Cameron has resigned and his departure timed for October to allow time for the Conservative Party to elect a new leader. Financial markets are volatile and across the world the implications of the UK’s decision are being evaluated. The referendum question was entirely a political one. The answer has raised major constitutional and economic as well as political issues. The UK is not only divided in terms of its component nations; it is also divided according to social grouping and education as well as age and profession. Younger voters were more likely to vote to remain. Older voters over 65 were likely to want to leave. Educated degree level voters are likely to want to remain and the mass of relatively economically poor and poorly educated voted to leave. Paradoxically the implications of leaving are likely to hit that group more severely than the group that wanted to remain. The UK is divided and opposing arguments on both sides in the run up to the referendum adopted scare stories that were difficult to support on the available evidence. The central focus on immigration became a major reason for the vote leave campaign to be so successful. Expert analysis was not taken seriously or even, if considered, not believed. Strictly and legally the referendum is not binding in law, though its political mandate binds political parties and their leaders. Interpreting the result of the referendum and its implications was always going to be difficult.
The Consequences of leaving?
The full implications of the vote to leave the EU on 23rd June are unknown. It is the first time a major member state has decided to leave. The UK’s membership was agreed in 1972 and during the intervening 40 years the UK has integrated and adopted many EU Directives, laws and regulations. Exiting the EU will have major implications for key policy areas. It will also require delicate negotiation within the UK as to how best to recognise the desire of Scotland, London and N. Ireland to remain. It is highly likely that Scotland will ask for another referendum on leaving the UK.
There is also significant consequences for the party politics of the UK. The Conservative party will have to elect a new leader and ensure that the selected leader as Prime Minister will be able to negotiate with Brussels the conditions of exit. The opposition parties will face questions about why their connection with their core voters failed to provide a majority in favour of remaining. Doubts remain about the effectiveness of the Labour Leader.
The House of Commons and civil service will face an unprecedented workload in order to fashion the relevant legislative changes agreed with the EU.
The procedures for leaving Article 50 TEU
Article 50 of the Treaty of European Union provides a mechanism for a Member State to leave the EU. It has never been invoked before. Formal notification of the European Council that the UK wishes to leave will activate a process. The European Council draws up guidelines that state the terms of the negotiation. The applicant state has no role in the content of the terms of the negotiation. The EU through the EU Commission will settle the withdrawal agreement including detailed rules and time-limits. The withdrawal agreement is concluded and on the basis of qualified majority voting approved by the EU Council. The leaving state may request to join the European Free Trade Association (EFTA) and the European Economic Area ( EEA).
The time-table is hard to predict. It is likely that the withdrawal can only take effect from the time of the withdrawal agreement being accepted and put into force. This is likely to take place two years after the UK has first notified the European Council of the intention to withdraw.
In UK domestic law, the European Communities Act 1972 will have to be amended and revised in the light of the laws, regulations and rules that the UK decided to keep.
There is some discussion that it is possible to withdraw through an alternative route to Article 50. This would mean ignoring the provisions of Article 50 and presumably against the views of the European Council and the other Member States. Even if a unilateral withdrawal were possible, then coming to negotiations with Member States over trading arrangements would prove to be very difficult. The consensus of opinion is that Article 50 is the only route both in law and in practice1.
There are wide-ranging consequences of the decision to leave the EU. The UK will have to come to terms with the votes to remain in London, Scotland and Northern Ireland. This may well lead to the break-up of the United Kingdom. The seriousness of this is obvious in terms of the constitutional dynamics of change. The role of the Luxembourg Court of Justice will also have to be considered. EU Member States will have to continue to apply the jurisprudence of the Court- involving UK companies and agreements. This horizontal effect will have to be considered and is likely to cause considerable uncertainties in the years ahead.
The most obvious consequence is that the UK and the EU will have to live with economic volatility as markets adjust. Banks will remain vigilant in the coming months but investment decisions may well be put on hold for some time to come. London’s role as a financial capital will come under pressure and the ability of the UK to trade with the USA and other countries will need separate negotiation. The UK is a permanent member of the UN but its status in the world may well suffer. Pensions and financial instruments will have to be carefully monitored.
The decision to leave the UK marks a fundamental shift in the constitutional, political and economic affairs of the UK. There are many important questions to be addressed, not least as to why evidence based policy making should be so uniformly rejected. Experts from every field of study were not listened to; bankers and economists dismissed for their “ vested” interest as an angry and acrimonious third estate voted against the establishment, including the consensus of opinion to remain among the main political parties. Uncertainties as to the future of “ normal “ party politics and political parties will leave a troubling shadow over the body politic. The role of the media and populism may have made a short term victory but in the long term disillusioned voters may vent their anger. There are at least 3 million EU nationals in the UK representing 6.6 of the workforce. If resident for five years they will be entitled to stay through their qualification for permanent residence. The remainder will have to hope that their rights will be resolved including whether they have the right to bring family members to the UK.
Immigration will remain hard to control and the effectiveness of new controls harder to predict. New rules as to who may come to the UK will also leave uncertainties. UK nationals living in the rest of the EU will not necessarily receive their current entitlements once the date of leaving is agreed. Workers and professionals wishing to work in the EU will have to apply under the existing blue cared scheme, but even this will have to be negotiated.
Uncertainty and risk will define the UK and to some extent the EU in the coming years. Assessing the future will really depend on how successful the negotiations will be and that is impossible to predict. The UK’s institutions, the mainstay of many of its constitutional protections will be put under incredible strain. The art of governing and decision making is likely to be defined by the referendum decision with little predictability about the long term effects.
1. House of Commons Library Briefing Paper number 7551 EU Referendum: the process of leaving the EU.