1st July 2016- Brave New World or Apocalypse Now?

It is the 1st July 2016, the political maneuvering,  celebrity endorsements, speech making and campaigning are over and the fate of the UK in the European Union has been settled.  Amidst the mass of column inches, the “we were right” statements and hurried speculation about the future, what changes can the voters of this country expect, regardless of the result?

The days in the lead up to the referendum will be so frenzied that many of the UK’s voters and political commentators will be saturated and likely sick of the process that many will shut down completely in the post referendum haze.

The EU referendum is the most profound political change to affect the UK in the last quarter century, that much is undeniable but will the common voter care after the vote has been decided?

The popular perception is that a vote to remain in the EU means that nothing will change, that the status quo will continue and things will remain as they are.  This will in all likelihood not be the case, as fallout from the vote sets in. Regardless of the result, changes will occur, many will be subtle but many more will be shattering to the existing political, social and economical structures that exist in this country at present.

The first casualties will undoubtedly be the “Brexiteers” .i.e. those MP’s who elected to join the Brexit campaign since its inception. Cabinet ministers should remain largely unaffected, with the exception of Michael Gove, the Justice Secretary who will probably end up being reshuffled out of the cabinet after the referendum result.  In some senses, he will get off lightly as rebels like Boris Johnson and Iain Duncan Smith who so publicly opposed the Prime Minister in the campaign will face pressure to resign their seats in favour of Cameronites.

The strongest proponent of the remain campaign, the Prime Minister will enjoy an upsurge in popularity amongst the voters and will look to solidify his power base as he moves forward into the final years of his term.

In staying out of the referendum spotlight, the Labour party has ensured that it will remain largely unaffected by either a remain or exit result. In a classic case of political opportunism, Jeremy Corbyn has been keen for the party to remain unified in its desire to remain in the EU. They can afford to let the Conservative party carry all of the debating and infighting, then claim that they are above such petty conflict.

Emboldened by the vote of confidence, the Prime Minister can use the good feeling to hold renewed discussions with the other leaders of the European Union about the UK’s place within it. However in winning the referendum vote, the Prime Minister must check his ego at the door and will most likely claim that he has been given a strong mandate for reforming the EU by the voters.  Whether the leaders of the EU will be keen to have these sorts of discussions with him are anyone’s guess.

Economic uncertainty is almost a given in the aftermath of the EU referendum, as many investors will look to second guess the financial markets both before and after the vote has been cast.  Such a period of uncertainty could be highly detrimental to the UK economy, given its fragile status.  We will not see a panic in the same vein of the 2008-9 financial crash but can expect a drop in the value of investments at all levels of the financial services market.

Foreign investors could on the other hand be keen to put their money into the economy, taking advantage of a foreseeable period of economic uncertainty to make a fast buck.  Legislation may need to be enacted by the UK government to forestall this sort of fire sale in the UK.

An EU keen to reform its financial instruments may look to lessen current financial constraints as a sort of placation of the UK after a positive referendum result. Then again, the EU could look to punish the UK for its attempts to leave “the EU club”.

The area which will be the least affected, at least in the immediate aftermath of the vote would be the UK’s current sociological landscape. Economic migration and immigration will continue in the way that it always has, but the UK will be subject to larger sociological strain as both membership of the EU expands and the tide of immigration continues.  Remaining in the EU will not change the day to day sociological structures; people will still pay tax, attend hospitals and pay benefits.

Current commitments to EU legislation will continue, with the possibility of increased legislation in the weeks and months following the vote.

And now to the other side of the coin, what would happen if the vote endorsed the Brexit?

Would the vote to leave signal the swift exit of the Prime Minister? There is always a possibility that this will happen. Losing such a high profile vote would harm his credibility as both a world leader and leader of the Conservative party. Since Cameron has already said that this term will be his last as Prime Minister, the best option for the victorious Brexiters would be to keep him in power and consolidate their powerbase to take over once the term is over. Choosing this course would give the illusion of a strong and unified party to the general public and could fend off a renewed assault from the Labour party.

While the Prime Minister could remain a paper tiger for the rest of his premiership, other prominent remain politicians would fall into the sights of the Brexiters, chief among them being George Osborne.  Consolidation of power base and its eventual use could easily force the Chancellor out of his position and stop him from making any succession overtures when Cameron’s term ends.

The bombshell of a British exit from the European Union would ripple through Europe. Borders which remained open under the old way would be closed, legislation which affected Britain and British interests would become null and void and many Euro politicians would be out of a job.

The status of those individuals from the EU who live and work in this country as part of the free movement of workers and individuals would need to be quantified. Would they now be effectively deported? Or would a general amnesty on those already here and working here be agreed?

Radical changes to the current working visa system would not in all likelihood occur, but significantly more checks would be conducted with greater emphasis on excluding those individuals who were not here to work, or key workers. An Australian style points system would be favorable in this instance.  Asylum seekers and those fleeing war (like those in Syria) would still be welcome in this country, but benefit tourists would find it far harder to enter the UK.

The question of whether the UK would still allow the resettlement of Syrian migrants leads us to a larger question: Would the international status of the UK change if it were independent from the EU?

The simple answer is No. The UK is the world’s fifth largest economy and enjoys a prominent political and economic status within the international community. Changes made would be only evolutionary as the UK embraces its new status as independent from the EU.

Media speculation makes wild claims that the cost of holidays and travel within the EU would increase dramatically as a result of Brexit, but many of the countries of the EU rely on the income of British tourists so it is not in their final interests for these costs to increase.

As stated previously either referendum result would most likely cause a dip in the financial markets. The idea that many prominent financial institutions would up sticks; move to the continent in the event of a Brexit is pure media speculation and is ultimately not cost effective.  Large multi-nationals have a vested interest in trading in UK financial markets and have been aware of the referendum for some time now; it is naive to think that they haven’t made financial plans to remain in this market. Firms cannot afford to ignore the UK because as mentioned it’s the fifth largest economy in the world.

Signing up to the Single Market formed the basis of the last referendum on the EU and it is this battleground where the UK must make its presence felt.  Trade deficits and agreements need to be maintained and the UK will need to renegotiate entry into the Single market as an independent nation rather than a member of the EU. Other countries within Europe but independent of the EU have such agreements but they are far smaller economies but the UK would be a different kettle of fish. An agreement is vital and must be reached quickly, whether this comes at a cost of further concessions is a problem for the politicians to solve.

So, this brings us back to our initial question: Will the 1st July 2016 inaugurate the start of a brave new world or an apocalypse now?

Speculation can be made that either event will occur because we are in uncharted territory.  Will either result be in the best interests of the UK? We can say with some degree of surety that it will: Britain is a unique country in the world with a proud history and a place at the top tables of the world as a world leader.  This tradition will continue because the people of this nation will make it so.

 

 

© R Simmons. All Rights Reserved.

 

 

 

 

 

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