JUNE 27, 2016

Brexit: Prepare to expect the unexpected….

As the dust settles after the tumultuous events of the past few days, there is a noticeable lack of clarity from any political source as to What Happens Next?  Remain campaigners seem bewildered.  But they are not the only ones.  Most of the Brexit team, who should by rights be triumphant and strident at this point, appear rather the opposite.  Indeed the Brexiteers appear to have no more clue what ought to happen next than their defeated opponents.

In our last blog “Brexit: The Bottom Line – what will really happen if we vote to leave the EU?”, we predicted that, in the event of a Brexit vote, the “Article 50 notice” would be the most contentious issue. True enough, Article 50 has been one of the hottest topics in the media since Friday morning.  This is not surprising.  No Article 50 notice means no Brexit.  So the issue could scarcely be more critical.

Last week we speculated that David Cameron would, in reality, have precious little desire to serve the notice, preferring to put it off as long as possible in the hope of reaching a pragmatic deal with the EU in the meantime.  But we also thought that, under pressure from in his own cabinet and back-benches, he would not be able to hold off for very long.

However, it may just be that last Friday morning Cameron and his advisers pulled off a clever political stunt.  By resigning with a long and rather imprecise notice period, and making the point, reasonable on the face of it, that the Article 50 notice and EU negotiations should be handled by his successor, Cameron has succeeded in kicking the whole issue into the long grass – at least for several months, if not longer.

Re-capping on some of the key points in our last blog:

  • Right now we are still very much in the EU.
  • All EU regulations, including free movement of people and goods, still apply.
  • The Brexit process will not start until the Prime Minister serves the Article 50 notice.
  • There is then a period of two years to negotiate the terms of our exit.
  • Despite comments from Francois Hollande (and others) over the weekend, the EU and other member states have no say at all as to when and whether we serve the Article 50 notice. It is exclusively our decision.
  • Even when we leave the EU, all EU laws that have been incorporated into English (or Scottish) law will continue to apply, unless and until our respective parliaments have repealed them and replaced them with something else. Realistically, this will take many years.
  • If you run a business, your commercial agreements (their jurisdiction and enforceability) will not change as an immediate result of Brexit.

So, the Article 50 notice will be a task for Cameron’s successor.  But how fearless will he or she need to be?

It is worth bearing in mind that the issues they will face include:

  • Financial markets across the world are in turmoil, with fears of another global recession.
  • The SNP are demanding a further referendum on independence, arguing that the Scottish people didn’t vote to remain in a UK which was not part of the EU.
  • Two petitions – one in favour of a further referendum, and one in favour of London leaving the UK to remain part of the EU – are attracting huge support.
  • The UK’s EU Commissioner, Lord Hill, who ought to be pivotal in future negotiations with the EU, has just resigned.
  • The Labour party, with a leadership coup under way, is in chaos, making it impossible for a Conservative Prime Minister to anticipate levels of opposition support for any Brexit strategy.

To sail into the entirely uncharted waters of EU exit negotiations against that backdrop will require significant bravery, and a very determined sense of optimism, no matter who our future PM is.

Regardless of whether you supported Leave or Remain, would you put money on that Article 50 notice being served any time soon?

As events unfold over the coming months, one thing is for sure – it won’t be what we expected.


Brexit UK EU referendum

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