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What next for Brexit?

Despite all the rhetoric the referendum was a recommendation not a legal fact. The PM, cabinet and Parliament can ignore the result and vote to remain in the EU if they so wish.

The likelihood that there will be a second referendum is non-existent because the referendum process is a consultative one not as I said before, a legal one, why would you go on with a referendum process if you’re not bound by it?

The media talks about the absence of a plan from Farage (UKIP), Johnson (Conservative), Gove (Conservative), Hoey (Labour) and others.  They have lost sight of the fact that this was not a general election but was a referendum. Unless we have a general election and the ‘Brexit’ group form a new party and stand for election and get elected they have no legal input into the post-referendum process.

The politicians must now return to their respective parties, consult, consolidate, heal wounds and form policies around their own party ambitions and how they wish to respond to the result.

Constitutionally, it is now down to the government to determine whether or not they implement the result. The PM has called a cabinet meeting for this morning to discuss the government response to the result.

He is expected to take the same line that Osborne took this morning; that the government view is to accept the people’s decision and begin negotiations with the EU to exit.

The government must assure the global markets that it is in control and that any decision will be made sensibly and any plan to exit will be both transparent and one that aims to improve the UK economy, not harm it.

Talk about Farage and Sturgeon being at the table are nonsense as the government will lead any negotiations and they will be held on the basis that the UK is leaving as an entity. Neither Farage nor Sturgeon are part of the UK government.  There is talk that Sturgeon may try to veto the UK exit, she can’t, the Scottish Bill gives Westminster supremacy over the Scottish legislature. She can be an irritant to the process, but without the consent of Westminster, the SNP cannot leave the UK and cannot negotiate a separate deal.

There are no mechanisms that allow Scotland to remain if the rest of the UK leaves. Currently the membership of the EU is held by the UK and they have voted to leave. Scotland would have to apply for membership once the UK left and they would be treated as a new application; as would Northern Ireland, unless they chose to have a referendum about whether to unite with the Republic of Ireland.

The Labour party response and self-destruction is merely a side show and has no bearing whatsoever on the Brexit negotiations.

The PM has decided that he doesn’t wish to continue in post so a leadership election will take place for the Conservative party and sensibly the PM has said that his successor will be the one to press the Brexit button, not him. Therefore we will have a period of 3 to 4 months where there will be a lot of jostling for position from the EU institutions, the EU national leaders, the UK political parties, industry and the people prior to negotiations.

All sensible organisations and groups will use this time to prepare their negotiating positions prior to the real negotiations being carried out once the new PM is in place.

The new PM may decide not to implement the referendum result but to use it instead as a negotiating tool to secure a better deal for the UK as Cameron tried and failed to do. This is quite likely and the leader of the German Trade Association has already said that he would be open to a special deal for the UK as we are so important to the German economy.

In any case the new PM will at least have to be seen to respect the will of the people, and will appoint a negotiating team which will press the ‘Brexit’ button and conduct the negotiations to continue our relationship with the EU. I say this because there is no way that the UK can exist without the EU, nor the converse. Both groups are inextricably linked at every level of political, economic and social matters and the split will need to be done with surgical skill. It is not a simple case of in or out, it’s the consequences and the future relationship that matters now.

Some commentators say that it’s only once you have gone through the negotiation process that you arrive at an in or out position; especially when, as in the UK’s case, our dissatisfaction is so precise. So, expect the EU to offer some olive branches to entice us to stay.

Once the negotiating team have completed their work and the PM and cabinet have accepted it, the ‘new relationship’ will need to be approved by Parliament. At this point we can almost certainly expect that there will be a new general election as the parties ask the country to approve their mandates for governing the country with an in or out decision.

It’s at this point that the result of the referendum will finally be enacted into the constitution and not at any point before.

The predominant view of the protagonists that on 24th June 2016, we’d be in or out is, and continues to be, a myth and the truth is that it marks the beginning of the formulating the plan.

Conclusion

The Brexit referendum result that 51% of the UK wishes to leave the EU is an advisory result, not a legal one. There will now follow almost a year of uncertainty as negotiations get under way and the UK’s position out of Europe becomes clear.

The EU at the same time, both collectively and individually, will determine whether they want the UK to remain and there will be side negotiations that will in all probability lead to reforms. The one thing the EU does not want is for other countries to exit too.

We’re in for an interesting couple of years and as Osborne said this morning; the UK economy is strong and will survive the negotiations.

 

Brexit information without bias.
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John Doyle

John Doyle

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The Payments Business

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