As the EU Referendum campaign enters its final phase, opinion polls are suggesting a close outcome. A Leave vote is very much a possibility, and whilst there has been a lot of heat and noise about what this might mean, there has been little useful advice given about what would then happen in practice.
In simple terms, a vote to Leave will trigger a period of intense political uncertainty. Any attempt to divine the future relies heavily on conjecture, given the number of political, constitutional, economic and geopolitical variables. In this note we attempt to cut through all of that and focus on what is known about the formal processes and the likely political developments that will drive them.
The triggering of Article 50:
The formal process of leaving the EU is set out in Article 50 of the EU’s Lisbon Treaty. This Article, triggered by the UK Government, provides for a 2 year period for the UK to conclude its withdrawal and negotiate a framework for its future relationship with the Union. This new arrangement must be agreed by the European Council through a ‘qualified majority’ (the UK and 20 of the 27 others), and approved by the European Parliament.
In February David Cameron indicated that Article 50 would be triggered immediately in the event of a Leave vote, noting that “the British people would rightly expect that to start straight away”. However, this may well not be David Cameron’s call (see below), and even if it is the timing has been brought into question: Michael Gove, for example, said that “no responsible government” would act so hastily and that the UK Government could set its own pace. We agree: it seems likely that any formal process will be put on hold for a while at least.
It is worth noting that Michael Gove has also suggested other options for withdrawal; for example, through repealing the 1972 European Communities Act. This would be controversial as it would be in breach of the UK’s treaty obligations. Using Article 50 seems the more likely path.
The future of the Prime Minister:
David Cameron has said he will not resign as Prime Minister in the event of a vote to Leave, and that he would stay on to negotiate exit. Cameron is a great survivor, but many think the decision will not be his to make. On 24 June a recently-defeated Prime Minister would be under pressure from all sides, and it is of course difficult to see how he could credibly negotiate about an outcome that he so recently vigorously opposed.
If he did try to stay the Prime Minister is likely to face a challenge from the Parliamentary Party via the 1922 Committee. Under Committee rules, if at least 50 MPs sign a no confidence motion against the Party Leader then a leadership contest will be triggered. At this point, unless the Party swings quickly behind Cameron as the only realistic leader – hard to do after an extremely fractious and personal referendum campaign – he will go. It is worth noting that this scenario may arise even in the event of a narrow Remain victory.
Conservative Party Leadership Contest:
Should Cameron announce his resignation or be forced out it is important to note that initially he will be giving up leadership of the Conservative Party, not departing from Downing Street. The Conservative leadership election has two stages, in which MPs first narrow the field down to two candidates, and then Party members decide between them. This would likely take weeks, and possibly months, during which Cameron would almost certainly carry on as Prime Minister.
In the leadership contest it is received wisdom that one of the two candidates would be Boris Johnson, given his popularity amongst the Conservative grass-roots – although he is less popular in the Parliamentary Party, with some MPs seeing him as divisive, clownish and untrustworthy. Do not rule out an attempt to deprive him a place on the ballot. The other potential candidates may include:
- Theresa May, who has tried in public to walk a line between the Remain and Leave camps, seemingly in an effort to appeal to a broad coalition in the Party.
- George Osborne, although he has kept a low profile since the budget debacles earlier this year and would be polarising in the Party.
- Michael Gove, who has ruled himself out but may conceivably change his mind given that he is more of a ‘unity candidate’ on the Leave side than Boris Johnson.
- Lesser known figures such as Sajid Javid and Stephen Crabb, who are less divisive than some of their higher profile colleagues, and who may receive the backing of Osborne and his allies in the Parliamentary Party.
The fact that Labour has such an unpopular figure at its head means that the Conservatives can afford to look at less telegenic and ‘electable’ leaders than otherwise might have been the case – which is bad news for Boris Johnson, whose biggest calling card is his relatively high public popularity. Some may think that even Michael Gove can beat Jeremy Corbyn.
It is a certainty that the leadership contest will set the tone for the withdrawal negotiations, given that candidates will need to win a mandate from a largely Eurosceptic Conservative Party membership base. Expect some quite extreme promises of what can be secured from the EU.
The role of Parliament and the prospect of a snap general election:
Despite the Referendum result, there will remain a significant pro-EU majority in the House of Commons (more than 70% of MPs are currently campaigning for Remain). This may result in significant complications. It is hard to imagine that Parliament would defy the result of the Referendum, the exact terms of UK’s exit could be subject to debate, particularly over the UK’s continued position in the single market (this will, of course, be dependent on what the EU is willing to negotiate with the UK).
If this dispute was to provide a significant road-block to the process of withdrawal, then it could conceivably raise the prospect of a snap general election. Under the Fixed Term Parliaments Act, a snap general election cannot be called without the support of two-thirds of the House of Commons. However, with a divided Conservative Party and a Labour Party which may, for its own Machiavellian reasons, welcome an early election (a loss would provide a good excuse to dump Corbyn), this is not an impossible hurdle to overcome.
None of this political manoeuvring will happen in isolation. After a Brexit vote the UK would likely be experiencing high volatility in financial markets, with some analysts predicting sharp falls in the value of sterling, and strong capital flows out of the UK. There will be bitter recriminations from the EU itself and from other member states, with fears of ‘contagion’ (ie that other member states would also want to leave the EU if the UK receives too good a deal) providing an incentive to ‘punish’ the UK for leaving. In Scotland the SNP will very probably use the result as a pretext for a second independence referendum, and there will be concerns in Northern Ireland about the future of the UK-Ireland border and the implications for the peace process. And there may well be legal challenges to the referendum process.
All of this uncertainty means that the UK Government will be under pressure to provide a degree of clarity very soon after the referendum about what happens next. But there is no indication that such clarity would be forthcoming, given the complex political and constitutional challenges ahead.
Newgate Communications are hosting a ‘View From the Bridge’ event with an in depth look at the EU Referendum result on 24th June. Further details can be found here