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Britain has voted to leave the EU – what happens next? Britain has voted to leave the EU – what happens next?
(about 5 hours later)
The UK’s historic decision to end its 43-year love-hate relationship with the European Union represents a turning point in British history to rank alongside the two world wars of the 20th century.The UK’s historic decision to end its 43-year love-hate relationship with the European Union represents a turning point in British history to rank alongside the two world wars of the 20th century.
On the assumption there is no turning back, or collective buyer’s remorse, Britain will live with the political, constitutional, diplomatic and economic consequences for a decade or more.On the assumption there is no turning back, or collective buyer’s remorse, Britain will live with the political, constitutional, diplomatic and economic consequences for a decade or more.
The pin on the atlas marking the UK’s place in the world has shifted, just as the centres of power in the UK polity. All the familiar points of authority in London society – Downing Street, big business, economic expertise, the foreign policy establishment – have been spurned by the equivalent of a popular cluster bomb. The pin on the atlas marking the UK’s place in the world has shifted, as have the centres of power in the UK polity. All the familiar points of authority in London society – Downing Street, big business, economic expertise, the foreign policy establishment – have been spurned by the equivalent of a popular cluster bomb.
So what happens next?So what happens next?
The politicsThe politics
The scale of the destruction wrought by independence day is such that one of the last redoubts of the establishment left standing – the civil service led by the cabinet secretary Sir Jeremy Heywood – will take centre stage. The scale of the destruction wrought by independence day is such that one of the last redoubts of the establishment left standing – the civil service led by the cabinet secretary Sir Jeremy Heywood – will now take centre stage.
It will be his task, in conjunction with the governor of the Bank of England, Mark Carney, and David Cameron to bring a semblance of shape to the chaos that is likely to ensue. It will be his task, in conjunction with the governor of the Bank of England, Mark Carney, and David Cameron acting as a caretaker prime minister to bring a semblance of shape to the chaos that is likely to ensue.
The prime minister has insisted he will accept the instructions of the British people and be in his study in Downing Street ready to carry out those orders. Cameron insisted in his resignation statement that he would accept the instructions of the British people and will now be in his study in Downing Street surveying the wreckage of his political career.
But it will be for him to decide whether he will try to stay as planned until 2019, or instead announce that he will remain until a Conservative party leadership election in the autumn. Faced by the scale of his rebuff, he rejected the half sincere entreaties of his backbench MPs to try to stay as planned until 2019 , and instead instead announced that he will remain until a Conservative party leadership election in the autumn. Two old hands, the veteran Conservative Kenneth Clarke and Lord Butler, the former head of the civil service, were right to predict Cameron would be gone within hours of the defeat, arguing his political authority – and spirit – will have been destroyed.
Neither option is attractive. The former smacks of a tone-deaf arrogance; the latter may create further instability at a time when the markets crave certainty. To have tried to linger in the wake of such a catacylsmic personal misjudgement would have smacked of tone-deaf arrogance. By agreeing to stay until autumn, he at least provides time for the Conservative party to put flesh on the frankly skeletal Brexit plan set out by the official Leave campaign.
The cabinet manual is clear: the prime minister cannot leave until he can advise the Queen on the identity of his successor. Either way, the Labour leader Jeremy Corbyn is likely to mount a confidence vote that will not pass.The cabinet manual is clear: the prime minister cannot leave until he can advise the Queen on the identity of his successor. Either way, the Labour leader Jeremy Corbyn is likely to mount a confidence vote that will not pass.
However long the political machinations last, Cameron and the chancellor, George Osborne, face a dilemma. The vast majority of MPs and peers are pro-Europeans who have been shown to be out of step with public opinion. The sceptics may number no more than 200 in the Commons, but that minority has been shown to speak for the people. It leaves the locus of political authority in the UK in dispute. However long the political machinations last, Cameron and the chancellor, George Osborne, face a dilemma.
The negotiationsThe negotiations
Cameron has vowed if there is a Brexit vote he will trigger article 50, the part of the Lisbon treaty that sets in train a two-year process whereby a member state can notify the EU council of its decision to leave. Cameron had vowed during the campaign that if there was a Brexit vote, he would trigger article 50, the part of the Lisbon treaty that sets in train a two-year process whereby a member state can notify the EU council of its decision to leave.
Constitutionally, the triggering of article 50 is a decision for him alone, not parliament, since it is a matter of the royal prerogative. At the same time, nothing can stop parliament passing a motion that seeks to instruct him not to trigger article 50.Constitutionally, the triggering of article 50 is a decision for him alone, not parliament, since it is a matter of the royal prerogative. At the same time, nothing can stop parliament passing a motion that seeks to instruct him not to trigger article 50.
Cameron’s statement that he would trigger article 50 was in part made to dramatise the irreversibility of Brexit. This starts a two-year negotiation with the EU that must end with the UK’s ejection, unless the union unanimously agrees to extend the negotiations at the two years’ end. Cameron’s statement in the campaign that he would trigger article 50 immediately in the wake of a Brexit vote was made to dramatise the irreversibility of Brexit. But many sceptics, including Michael Gove, Daniel Hannan and Lord Howard, stressed it would be quite wrong to trigger article 50 in such haste. Once it is triggered, the clock starts ticking on a two year renegotiation with the EU that must end with the UK’s ejection unless the EU member states unanimously agree to extend the negotiations.
The UK then formally leaves once a deal – which requires the support of the UK and a “qualified majority” of the remaining 27 member states (specifically, 20 of them, comprising at least 65% of their population) is struck. It was significant that Cameron in his resignation statement said any exit negotiation strategy would take time to be developed, and involve consultations with the governments of Wales, Scotland and Northern Ireland. He stressed “it is right the new prime minister takes the decision about when to trigger article 50 and start the formal and legal process of leaving the EU.”
If at the two years’ end neither a deal nor an extension has been agreed, the UK automatically reverts to World Trade Organisation rules, meaning the UK faces tariffs on all the goods it sells to the EU. So if the UK triggers article 50, Britain will have wilfully leapt on to a conveyor belt that ends with the EU holding all the bargaining chips. Even in spite or out of despair, it is doubtful Cameron would wish to step immediately on to such a conveyor belt.
The prime minister will be operating largely at the sufferance of the Brexit wing of his party. That wing is disunited to the point of dysfunction and will need time to absorb their unexpected victory. Some Brexiters have for months quietly pointed out the referendum is advisory and asks voters’ views only on whether to leave the EU. It is silent on the form of the departure. An Irish referendum, by contrast, posed very specific legal questions, giving clear instructions to the politicians. The article 50 process has been constructed to give the negotiating advantage to the EU, and not the country planning to leave. If at the two years’ end neither a deal nor an extension has been agreed, the UK automatically reverts to World Trade Organisation rules, meaning the UK faces tariffs on all the goods it sells to the EU. So if the UK triggers article 50, Britain will have wilfully leaped on to a conveyor belt that could end with the EU holding all the bargaining chips.
Cameron now faces a constitutional impalement. The parliament elected in 2015, and from which he derives his authority, has through the referendum been overridden. The vast majority of MPs and peers are pro-Europeans who have been shown to have been out of step with public opinion. The sceptics may number no more than 200 MPs at most, but the referendum has shown that the minority speak for the people. It leaves the locus of political authority in dispute, as well as highlighting the anomaly of Scottish MPs committed to the union with Europe, but not with Great Britain.
For the next few months Cameron will be operating largely at the sufferance of the Brexit wing of his party. That wing is disunited to the point of dysfunction and will need time to absorb their unexpected victory. Some Brexiters have for months quietly pointed out the referendum is advisory and asks voters’ views only on whether to leave the EU. It is silent on the form of the departure. An Irish referendum, by contrast, posed very specific legal questions, giving clear instructions to the politicians.
Related: The Norway option: what is it and what does it mean for Britain?Related: The Norway option: what is it and what does it mean for Britain?
So Brexiters will face a choice between maintaining their pledge to withdraw from the single market and so ending the free movement of people, or whether instead to seek what has been described as purgatory – the kind of half-in, half-out arrangement enjoyed by Norway.So Brexiters will face a choice between maintaining their pledge to withdraw from the single market and so ending the free movement of people, or whether instead to seek what has been described as purgatory – the kind of half-in, half-out arrangement enjoyed by Norway.
Eurosceptic MEP Daniel Hannan has argued Brexit should be viewed as a process, not a single moment of departure, and a Norway arrangement for the UK might be a stepping off point before the final rupture in years to come.Eurosceptic MEP Daniel Hannan has argued Brexit should be viewed as a process, not a single moment of departure, and a Norway arrangement for the UK might be a stepping off point before the final rupture in years to come.
If the Brexiters are too leisurely, the electorate may become impatient, the pro-EU Commons majority start to mobilise, and the vista of a new election, providing new political mandates, becomes more imminent. Hard Brexiters will be impatient. If the Brexiters are too leisurely in seeking to leave the EU, the electorate may become impatient, the pro-EU Commons majority start to mobilise against Brexit, and the vista of a fresh general election, providing new political mandates, becomes more imminent. It is not inconceivable that a fresh general election, possibly contested by new leaders in both main parties and focussed on Europe, could see a call to revisit the referendum decision.
The EUThe EU
In all these calculations, the UK parliament will not be the only actor. The EU, faced by centrifugal forces, will wish to act decisively, something it rarely does. One group may urge the EU to demand that the UK triggers article 50; a second group, possibly led by the Poles, may explore whether the terms of the negotiation between the EU and the UK could be reopened. Many diplomats privately believe the German chancellor, Angela Merkel, should have conceded more to Cameron on free movement. In all these calculations, the UK parliament will not be the only actor. The EU, faced by centrifugal forces, is going to wish to act decisively, something it rarely does. One group may urge the EU to demand that the UK triggers article 50; a second group, possibly led by the Poles, may explore whether the terms of the negotiation between the EU and the UK could be reopened. Many diplomats privately believe the German chancellor, Angela Merkel, should have conceded more to Cameron on free movement. Germany itself insists they went to the maximum consistent with the single market.
But the majority EU view is likely to be that UK negotiations were finished in February, and that ship has sailed. The commission president, Jean-Claude Juncker, said before the vote: “Cameron got the maximum he could receive and we gave the maximum we could give. So there will be no renegotiation, not on the agreement we found in February, nor as far as any kind of treaty negotiations are concerned.” The majority EU view is likely to be that UK negotiations were finished in February, and that ship has sailed. The commission president, Jean-Claude Juncker, said before the vote: “Cameron got the maximum he could receive and we gave the maximum we could give. So there will be no renegotiation, not on the agreement we found in February, nor as far as any kind of treaty negotiations are concerned.”
The priority instead would be to prevent what has been described as the psychology of a bank run gripping the EU, as calls for parallel referenda proliferate in the Netherlands, France, Poland or Hungary. That, after all, has been the explicit goal of some leave campaigners. Michael Gove, for instance, called for the “liberation of Europe”. Once those demands grow, the whole EU project will slip from paralysis to disintegration. The priority instead would be to prevent what has been described as the psychology of a bank run gripping the EU, as the calls for parallel referenda proliferate in the Netherlands, France, Poland or Hungary. That, after all, has been the explicit goal of some leave campaigners. Michael Gove, for instance, called for the “liberation of Europe”. Once those demands grow, the whole EU project will slip from paralysis to disintegration.
Diplomats say a few months ago they thought the dominant European response to a Brexit was likely to have been calls for greater integration, but they say that mood has receded, partly under the influence of Tusk. The EU president is determined that Brussels be seen to be learning the right lessons.
With French and German elections next year, a Franco-German effort to deepen the eurozone’s fiscal and monetary union – by pooling resources and drawing up stricter common economic rules – just looks off the table, according to senior diplomats and officials. There is also talk in Berlin of a senior European statesman leading a review of how the EU functions traveling the capitals of Europe in search of a new vision.
Any divorce settlement would focus on mundane budgetary issues – pension liabilities, properties and other assets, and deal with budgetary questions. It would also cover the rights of EU nationals based in the UK and vice versa. Either way the EU can afford to give the UK an easy ride in the negotiations. Those talks will take time to organise, and delineate. The presidents of the European commission and the European Council want the ‘divorce settlement’ to be kept apart from an agreement on future trading relations.
Any divorce settlement would focus on mundane budgetary issues such as pension liabilities, properties and other assets. It would also cover the rights of EU nationals based in the UK and vice versa.
A key interim will be whether UK-based financial firms lose their EU “passport”, whereby firms registered in one member state are allowed to do business across the bloc without needing further authorisation.A key interim will be whether UK-based financial firms lose their EU “passport”, whereby firms registered in one member state are allowed to do business across the bloc without needing further authorisation.
Separately, the higher-stake trade talks will look at whether the UK rejoins the existing European free trade agreement or instead strikes outside on a free trade treaty of its own.Separately, the higher-stake trade talks will look at whether the UK rejoins the existing European free trade agreement or instead strikes outside on a free trade treaty of its own.
Beyond that, talks with the Irish government, the Commonwealth, Nato and innumerable other bodies await. The success of these complex negotiations will depend on the chemistry of the relationship between the UK and Europe post-Brexit, and whether the triumphalists or the pragmatists in the Brexit camp hold sway.Beyond that, talks with the Irish government, the Commonwealth, Nato and innumerable other bodies await. The success of these complex negotiations will depend on the chemistry of the relationship between the UK and Europe post-Brexit, and whether the triumphalists or the pragmatists in the Brexit camp hold sway.
That in turn will depend on whether Cameron can restore relations with the two old friends that have laid him so low – Gove and Boris Johnson. After the events of the past two months, everyone knows they travel without maps. That in turn will depend on whether Cameron can restore relations with the two old friends that have laid him so low – Gove and Boris Johnson. After the events of the past two months, all the actors know they travel without maps.