JUNE 16, 2016

Brexit: The Bottom Line – what will really happen if we vote to leave the EU?

In the run-up to the Referendum on 23rd June, politicians and commentators on both sides of the debate are in passionate verbal combat over the principles of British sovereignty.

But with emotions running so high, and each side slipping further and further into predictions of Armageddon, both “Leave” and “Remain” campaigns are glossing over the practical question of what will actually happen if we vote to leave.  The question could scarcely be more important.

So to accompany your last minute considerations of “In” or “Out”, here is a Brexit Fact-Buster:

Does a “Leave” vote on 23rd June take us out of the EU?

No.  No matter which way we vote, come the morning of the 24th June Britain will still be very much in the EU.  The referendum, strictly speaking, has no legal effect at all.  It expresses the will of British people, but as it is purely advisory, the government could technically ignore the result completely.  (Further consideration of this below.)

If we vote for Brexit, how does the UK actually leave?

If we want to leave, the government is required under Article 50 of the Treaty on European Union (the Lisbon Treaty) to serve a notice on the European Council.  This notice sets off a period of up to two years in which we negotiate with the European Council on the terms of our withdrawal.

How likely are we to conclude acceptable terms within the two years?

Unsurprisingly, the Lisbon Treaty was not drafted with the aim of making it easy or convenient for any member state to leave.  The balance of power is undeniably with the remaining member states.  Both Leave and Remain campaigners have said that the UK punches above its weight, holding substantial influence in the EU, and that it has considerable strength at the negotiating table.  In many respects, this is true.  But on paper, when it comes to Article 50, the dice are somewhat loaded against us.  This is not least because:

  • the terms of the withdrawal have to be agreed by at least 72% of member states
  • some terms that we would want, eg certain new trade deals, would have to be agreed by 100% of member states
  • there can be no extension of that two year period without the unanimous consent of all EU member states. (If we can’t get the agreement of as much as 72% of members within two years, it isn’t immediately obvious how we would get 100% agreement on an extension.  So this isn’t worth banking on.)

On top of that, there are two significant elections within the most influential EU member states, which are major distractions likely to create a further hindrance for us in our negotiations.  The French presidential elections, and German federal elections, both take place in 2017.

With so many stakeholders within the EU, with conflicting vested interests, it requires a fairly optimistic mindset to predict that the UK will secure a good deal for itself within the two year period.

What happens if we don’t agree the terms we need within two years?

Assuming that we don’t agree terms within two years, and that we don’t get 100% agreement on an extension of time, then at the end of the two years, our membership of the EU will simply come to an end.  At that point:

  • our access to the Single Market comes to an end
  • tariffs automatically apply, making sales to, and purchases from, the EU more expensive
  • the rights of UK citizens to travel to the EU are compromised, just as the rights of EU citizens to travel to the UK
  • all UK laws which give effect to EU regulations remain in force, but can be changed over time, eg through Act of Parliament.

Can we leave the EU without going through Article 50?

Technically, yes.  (Even though we would be in breach of EU law in doing so.)  A number of Leave campaigners have suggested we should leave without going through Article 50.  But it is difficult to see what we would gain by this.  If we pass an Act of Parliament which takes us out of the EU without following the statutory procedure, then we would be leaving without any EU negotiation at all.  There isn’t an obvious reason why the remaining member states would be more inclined to negotiate trade deals etc with us if we did this, rather than if we followed the EU process.  If anything, it potentially makes our negotiating position worse.

Can we vote for Brexit, use it as ammunition for renegotiations with the EU, but then remain in the EU?

This is arguably the most critical question of all.  And the answer is that it depends on whether or not the UK government serve the Article 50 notice.

If we serve the Article 50 notice, the answer is no.  Our membership of the EU will terminate when the notice period expires.  Once we serve that notice, there is absolutely no going back.  If we haven’t by then secured a good deal on continuing trade with the EU, we will be in a difficult position.

David Cameron has said that “a vote to leave is a vote to leave”, and that following a vote for Brexit the government would serve the Article 50 notice right away.  Many commentators say that Cameron would have no choice but to do so, as anything else would make his position as Prime Minister and leader of the Conservative party completely untenable.  There is much sense in this view.

However, some Leave campaigners have suggested that we should not serve the Article 50 notice right away, and instead we should use the outcome of the referendum to negotiate a better deal with the EU.  They argue that it would be the shock to the system that the EU really needs in order for them to make major changes.  Privately, some campaigners have indicated that we would secure better terms with the EU this way, without needing to leave at all.

There may be some pragmatic merit to this, although it is difficult to imagine how David Cameron, with pressure from back-benchers as well as from Leave campaigners in his own Cabinet, could hold out for very long without serving the notice, whilst EU negotiations continued.

The UK’s referendum is unprecedented.  No-one in the EU – voters, politicians, commentators – has previous experience of Article 50 to draw on.  But key to the decision whether to vote “In” or “Out” is some guesswork as to how quickly following a Brexit vote would Mr Cameron serve that all important Article 50 notice.

Before you decide, put yourself in Mr Cameron’s shoes for a moment and think about it: faced with a referendum decision in favour of Brexit, what would you do?


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