Following what was to many a surprise vote by the electorate to leave the European Union, the United Kingdom faces an impending exit from the bloc that has underpinned its strategic outlook for the past forty years. With this comes huge uncertainty, uncertainty over the UK’s future relationship with Europe, and the world; uncertainty over the direction of British domestic politics; uncertainty over the UK’s economic future – both short and long term, and uncertainty over the very future of its own union, that of the United Kingdom itself.
A significant rupture
The United Kingdom has always been somewhat of a reluctant member, standing slightly aloof from the European project as the French and Germans drove its continued integration. This was reflected in its special status within the club, with the UK maintaining its own currency, outside the Schengen no-border zone, and, following David Cameron’s widely refuted renegotiation, exempt even from the EU’s moves towards “ever-closer political union”. Yet, despite this, the EU very much underpinned the UK’s strategic economic and political outlook, albeit in tandem with the UK’s ‘special relationship’ with the United States. 44.6% of British exports went to the EU in 2014; the City of London has used Single Market membership to position itself as Europe’s primary financial centre; and European cooperation has formed one of the central tenets of British foreign policy and its diplomatic relations. Thus has provided the UK with the ability to shape the direction of European foreign and domestic policy, as well as acting as an amplifier for the UK’s ability to influence global issues, as was perhaps most evident at the 2016 Paris Climate Change Conference. While Britain has never been a fully-fledged member of the European club, there should be no doubt, therefore, of the sheer magnitude of the effects of this sudden rupture.
To add to the scale of the challenge of reorienting Britain’s relations with Europe is the absence of virtually any consensus among the elites or the wider populace as to the desired future shape of Britain’s political and economic relations with Europe.
The business and financial community is almost wholly committed to continued membership of the Single Market, which, among other benefits, brings tariff free access to a market of 500 million. Without this, the UK would undoubtedly be less attractive to foreign investors, who would suddenly face tariffs on the export of goods and services into Europe. The City of London would also be badly hit, stripped of its EU passporting rights and thus unable to trade in euro-denominated financial instruments. Any doubters who continue to mindlessly label such comments as ‘Project Fear’ – the term coined to disparage arguments in favour of Britain’s continued membership – should look no further than the immediate effect of the vote, which not only saw inevitable market turmoil but was also accompanied by the withdrawal of a number of expressions of interest in Tata Steel’s UK operations, Britain lost its AAA credit rating, and large employers such as Vodafone were among those stating that thousands of jobs may be moved to the continent.
Remaining in the Single Market, however, would be anathema to the majority of those who voted to leave, for whom the freedom of movement of persons – a core tenet of the Single Market – was the central rationale behind their vote for Brexit. As Douglas Carswell MP stated, for them ‘Out is out’, and all credible voices in the Conservative Party leadership battle have echoed the same this week. While the details of the UK’s future relationship with Europe was not on the ballot paper, they strongly believe they have a mandate to reinstate full British control over its immigration policy, and have strong public backing for this. The EU, however, has made it clear that freedom of movement is not up for discussion when it comes to Single Market access, and be in no doubt that it is the EU who holds the power in those negotiations. With just two years to negotiate Britain’s exit once Article 50 is triggered, there is no time to waste in debating these central questions.
A dis-United Kingdom
The historic vote also marks a significant shift in domestic politics. Scotland’s First Minister Nicola Sturgeon has announced concrete moves towards another independence referendum, a move that would likely garner greater support in the light of the vote, which saw Scotland vote overwhelmingly in favour of remaining in the EU. In Northern Ireland, Sinn Fein has also made calls, albeit with less weight, for a referendum on Irish reunification. In England, David Cameron has announced his resignation, and stands now a mere figurehead as his authority dissipates around him. Jeremy Corbyn, much maligned already by the Parliamentary Labour Party, faces full scale revolt over Labour’s failure to mobilise the working class vote in favour of continued membership. And The United Kingdom Independence Party has successfully cemented itself as a mainstream political party, and is even pressing for a role in the negotiation with Europe.
The country is also deeply split on many fronts. The referendum witnessed clear generational divisions, with 75% of 18-24 year olds voting in favour of EU membership, versus 61% of over 65s who voted against it. Meanwhile, London, with its cosmopolitan and outward looking populace, was the only English region to vote in favour of continued membership. Compare this to the industrial heartlands of the North and Midlands in particular voted overwhelming in favour of Brexit. In fact, the Out vote appears to be symptomatic of much more than just euroscepticism. It was also a protest vote against what many see as an insular and out of touch Establishment. This feeling has been fuelled by years of austerity, rising inequality, the decline of British manufacturing and the resulting deterioration of many communities. Add to this the perceived and actual impact of rising immigration and you see a public whose faith in politics is rock bottom.
Faith in politicians waning
Unfortunately, public confidence in politicians is not likely to rise any time soon. On the one hand, bereft of the ability to blame all of our struggles on the EU or on immigration, politicians have fewer tools to deflect public anger. On the other hand, this was a referendum campaign based on at best partial truths and at worst blatant lies. Many ‘outers’ are already bemused by the Government’s desire to delay triggering Article 50. Imagine how they’ll feel when the promises of extra funding for the NHS, of no negative economic impact from leaving, and of a fall in net immigration to the tens of thousands by 2020, do not materialise. Disenchantment may quickly turn to outright hostility.
As the dust settles on the campaign, the overwhelming sense is thus one of uncertainty. The British public has made a historic decision to cut itself free of the European Union. The problem is that as it turns its gaze away from Europe, it appears to have little idea with regards to where it looks next.