The day after the night before one of the leading google search terms in the UK was ‘What does Brexit mean? which suggests that at least a few – and maybe many – people did not fully understand what leaving the European Union actually meant. Today, the United Kingdom is starting the process of coming to terms with its new reality.
The full implications of the decision made on June 23rd may take several years or even decades to realise but there are a couple of things that are immediately evident starting with the fact that we have exchanged one question about whether Brussels or London rules the United Kingdom for another on whether there will be a United Kingdom to rule at all.
Not surprisingly, the Scottish Nationalists are setting out on the path toward a second referendum on independence after voting overwhelmingly on Thursday to stay in the European Union. With the declining price of North Sea Oil, the economic arguments in favour of independence are undoubtedly weaker than two years ago but the charge that England, (& Wales) is dragging Scotland out of the EU against their will, could be a powerful argument even with those who voted ‘No’ in 2014.
In Northern Ireland, which also voted to remain in the EU, the hard-won peace and stability ushered in by the Good Friday agreement could well find itself on shaky ground. The Eire Taoiseach says that a united Ireland is low down the list of priorities but others clearly sees a commonality of cause in EU membership to promote the possibility of an independence referendum in the North as well.
Whether this comes to pass or not is pure speculation at this stage, but the prospect of a fenced land border between England and Scotland and the two Irelands – that could well be necessary to close a backdoor to illegal immigration through the EU – is a greater possibility today than this time last week.
The UK seems certain therefore to endure a level of political instability over the next couple of years not seen since the start of the 20th century or the Great Depression. An early General Election seems highly likely as at least one new Party leader searches for a renewed mandate from the electorate. Whether Boris Johnson, Theresa May, or another candidate succeeds David Cameron as Prime Minister, there would surely be a compelling argument to go to the country if only to re-balance the Parliamentary party into one which is more reflective of the Leave vote. But could they win an outright majority? Boris probably has the best chance but given the factors which influenced the outcome of the referendum, there is no guarantee – even with his charismatic leadership – that he would be in a position to defend the current Conservative majority let alone increase it, especially if the Labour Party got its act together.
The Parliamentary Labour Party is surely sensing this and is why a number of MPs have decided to move against their own beleaguered leader, Jeremy Corbyn. A more effective opposition would certainly be a far greater threat to the Conservatives than they are today, particularly if retaining access to the Single Market or some stronger statement on Britain’s relationship with the EU were put at the heart of their manifesto. Like the Conservatives, however, Labour may also find it hard to agree on a candidate that would be both acceptable to their current membership and capable of winning an outright majority.
Turbulence and uncertainty, to put it mildly, then seems to be the most likely and immediate outcome of the decision taken last Thursday. Not the type which we saw infect the markets in the hours after the results came in. That was to be expected and also the result of some hasty and highly risky positions taken by traders on the scantest of information before the results came in.
No. It’s the type of uncertainty which impacts purchasing decisions and holds back investment as people and organizations exercise the most natural of human behaviours – let’s wait to see what happens before taking any big decisions or – worse – let’s ‘run for cover’. Only the very brave run counter to this – and to be fair, there are a few of those – but the effect of not doing so can be potentially paralyzing. It’s this that poses the greatest risk to the economic recovery which we have worked so hard to achieve over the past five years or so and is almost certainly the reason why at least one of the ratings agencies have downgraded their view of the UK’s credit-worthiness. The impact of such downgrades on the ability to borrow are questionable but it is undoubtedly a reflection of their confidence in a country’s economic outlook and in times like these, sentiment can be everything.
The Leave campaign promised ‘sunny uplands’ without ever really being made to explain how we get there. We still might. The ingenuity, determination and creativity of the British people is boundless and is often under-estimated and George Osborne is right to say we start from a position of strength. But the challenges in front of us are perhaps more formidable than many of us realized as we cast our votes last Thursday.
We are now in a very fluid state of affairs and it would be a very brave man to predict with certainty where all this ends. Perhaps this explains why that google search term was so popular on Friday.
Mark Titterington is Vice-Chairman of the South East Conservative European Network