So, a slim majority of people voted for Britain to leave the EU. What does that mean?
The short answer is nobody knows. The UK hasn’t officially told the EU that it’s leaving. And won’t until October, at the earliest. Then the UK and the EU have 2 years to negotiate the terms of the divorce. So, it’ll probably be September / October 2018 before anyone really knows what leaving the EU means.
The Remain campaign told people that staying in the EU was better than being outside of it and tried to scare people into voting Remain.
The Leave campaign had 3 points
- Too much money was going to the EU. They said £350,000,000 per week, we can spend that money on things in the UK, like the NHS. The true total after rebates and money back from th EU is around £161,000,000 per week.
- Too many immigrants come from the former Eastern Europe taking our jobs. Lets restrict the numbers coming in
- Sovereignty. The EU is taking too much control away from the UK people and we must take control back.
All are perfectly valid points.
The vote was very high just under 72% of eligible voters took part. Some, perhaps, a lot of the Leave voters were registering a protest vote against the government and its austerity program. There’s a lot of anger that ordinary people are paying the price for bailing out the banking system.Also, at how easy the UK makes it for high earners to avoid paying their fair share of tax.
Now that they’ve won, the Leave campaign has to deliver on its promises and this is where the fun starts.
Already over the weekend, Senior members of Leave have been walking back on the promise to put an additional $350,000,000 per week into the NHS. They spoke of additional funding but wouldn’t give a number.
Countries like Norway and Switzerland who are part of the single market but not EU members have to accept free movement of labour i.e. anyone who wants to come a live / work in their country can.
As I see it, the UK will either have to leave the single market or let go of controlling immigration from the EU. I don’t see the EU allowing the UK to be in the single market but being able to control EU migration.
Sovereignty. There are broadly speaking 3 strands to this.
- EU Law. Currently 8-10% of all UK laws are created by the EU and the UK Parliament can do nothing about them. Also, the European Court can, under certain circumstances, overrule the UK Courts and the UK government.
- Single Market Regulations. In order to be part of the Single Market, the UK would need to follow the regulations for it. Again, the UK Parliament can do nothing about them
- Trade Deals. If the UK wants to have a trade deal with Australia, it can’t as all trade deals have to be EU wide.
Again, if the UK wants to be in the single market, it will have to follow its regulations. Currently, the UK has a say in those regulations as part of the EU. Moving forward, it wouldn’t.
As of today (27th June 2016) the markets are in turmoil as they have no idea how things are going to work out.
Already some of the UK and non UK banks are saying that they, probably, won’t be expanding in the UK but will be moving operations to EU countries.
How this is going to play out over the next 2 years and beyond is anyone’s guess.
It could lead to the breakup of the UK as Scotland and Northern Ireland voted to stay in the EU and want a referendum on leaving the UK.
It could lead to the UK being an economic powerhouse.
It could lead to the UK requesting to join the EU as it can’t survive outside.
Watch this space, it’s going to be a bumpy ride.