The Brexit fallout will make bittersweet history

In the days leading up to the United Kingdom’s decision to leave the European Union, former London mayor Boris Johnson called on the country to ‘make history’, but perhaps even he wasn’t to know exactly how historic the decision would prove to be.

More than 30 million people voted, the highest turnout since the 1992 general election. Fifty two per cent endorsed Johnson’s message and decided Britain’s part in the 60-year-old continent-wide partnership known as the EU would be consigned to history. 

Ironically, those areas that benefitted most from EU funding such as Cornwall and West Wales voted for Brexit. These areas were due to receive around €1,000 per person between 2014 and 2020 from the EU Structural and Investment Fund. That too, consigned to history.

Scotland, London and Northern Ireland all voted to Remain in the EU, prompting fears over the stability of the UK’s 300-year-old union.

And in the early hours of Friday morning the six-year premiership of David Cameron would follow, the Prime Minister declaring invocation of Article 50 of the Lisbon Treaty – formalising the UK’s withdrawal – was best left to someone who actually wanted to do it.

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“The British people have made a very clear decision to take a different path and as such I think the country requires fresh leadership to take it in this direction,” he said.

“I will do everything I can as Prime Minister to steady the ship over the coming weeks and months but I do not think it would be right for me to try to be the captain that steers our country to its next destination.”

Whether or not it was the realisation of all the ramifications and responsibilities that might come with orchestrating a Brexit, the following press conference from the prominent Conservative Leave campaigners Boris Johnson and Michael Gove was a markedly sombre affair. 

Johnson had certainly changed his tone. “We cannot turn our backs on Europe. We are part of Europe,” he said. In terms of negotiating Britain’s exit from the EU, there was “no need for haste”.
But it was not only Leave campaigners who adopted a markedly different tone.

After seeing more than £40bn wiped off the value of Britain’s biggest companies and the pound plunging to a 31-year low in the wake of the vote, Chancellor George Osborne was conspicuous by his absence until he emerged on Monday to reassure the markets.

“Britain is ready to confront what the future holds for us from a position of strength,” he said.

The economy would face “adjustment”, he added. Only days before he had said it would face recession and an emergency budget. 

Johnson too, had retreated for a few days, presumably to weigh up his options. But the Chancellor’s statement encouraged him out of hiding. 

“It is clear now that ‘project fear’ is over, there is not going to be an emergency budget, people’s pensions are safe, the pound is stable, markets are stable. I think that is all very good news,” he announced.

Shortly after the statements, Royal Bank of Scotland shares were suspended after plummeting 15.1 per cent. The financial sector had seen the biggest drops as millions were wiped off share values. The FTSE 250 index, often seen as a truer reflection of Britain’s economy, saw the biggest daily percentage falls since 1987’s ‘Black Monday’ crash.

Credit ratings business Moody’s informed a number of the UK’s largest banks that it was to revise down the outlook for their credit ratings to negative.

Fellow financial services agency Standards and Poor’s, who had calculated Friday’s crash as the biggest ever one-day loss in international stock market value – outstripping even the value wiped out following the collapse of Lehman Brothers during the 2008 financial crisis –   promptly downgraded the UK’s credit rating from AAA to AA with a negative outlook. The Brexit vote was “a seminal event”, it said. 

“The negative outlook reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the UK if there is another referendum on Scottish independence,” the agency added.

The statement was based on the fact 62 per cent had backed remaining in the European Union north of the border, although the turnout was down on the referendum on independence, and lower than in the rest of the UK.

First Minister Nicola Sturgeon said she would do “whatever it takes” to ensure Scotland’s continuing membership of the EU.

“The Westminster establishment has some serious soul searching to do, and I hope very much that it now does it. But as First Minister of Scotland I have a duty to respond, not just to the outcome across the UK, but also and in particular to the democratic decision taken by the people of Scotland.

“As things stand, Scotland faces the prospect of being taken out of the EU against our will,” she told a press conference.

After being told independence would lead to a European exit in the referendum of 2014, Scots voters now faced the “material change in circumstances” which would justify another, according to the SNP leader.

So another referendum is on the table, in the form of legislation to enable it to happen which Sturgeon says is being prepared. 

Realistically, though, the SNP are unlikely to hold one unless they think they can win it. A snap poll in the aftermath for The Sunday Post put support for Scottish independence up to 59 per cent. In the same poll, asked if Nicola Sturgeon’s bid to stay in the EU was the right decision, 62 per cent backed the First Minister, 33 per cent said it was the wrong decision and 6 per cent were unsure. 

If not independence, what other tactics could Sturgeon adopt to keep Scotland in the EU?  A legislative consent motion, if placed before Holyrood, would almost certainly end up with the Scottish Parliament refusing to endorse Brexit. But constitutional lawyer Adam Tomkins, a Conservative MSP who campaigned for Remain, said it may not matter.

“Holyrood has the power to show or withhold its consent, but withholding consent is not the same as blocking,” he tweeted. 

Clarity over what would happen was not forthcoming from Westminster. Candidates to replace David Cameron were not forthcoming, despite the Conservative Party’s 1922 Committee deciding a new one should be in place by early September. 

While the democratic mandate from the election implied a Brexiteer should now lead the UK out of Europe, even Johnson initially seemed reluctant to move.

Furthermore, those Conservatives who had campaigned for Leave did not appear to have formed a Brexit strategy. In a column in The Telegraph, Johnson was at pains to insist the UK could continue to be part of the European single market as part of “intense and intensifying” cooperation with Europe.

The idea has historic precedence. Iceland and Norway currently enjoy such a relationship with Europe, but they have signed up to full freedom of movement with EU countries. Despite Johnson’s defiance, both ideas were rejected in the referendum vote. 

Even if the UK does pitch for such an arrangement, membership of the European Economic Area would require the unanimous consent of all remaining EU member states, the European Parliament and the four European Free Trade Association states, Norway, Switzerland, Iceland and Liechtenstein. 

Johnson and Gove, who campaigned for Brexit on a case that access to the single market is possible without freedom of movement of immigrants, maintained there was “no need for haste”.
They may not have a lot of influence over the timescale, however. 

Article 50, once triggered, gives a two-year exit deadline for negotiations, and European leaders indicated they do not want a drawn-out process, fearing a domino effect among other Eurosceptics across the continent.

Certainly it will wait till a new Prime Minister is in place, but European leaders said they wanted a swift start to proceedings.

The “whole continent can’t wait for the Conservative Party to sort out its internal issues”, warned European Parliament President Martin Schulz.

German Chancellor Angela Merkel said while “a certain amount of time to analyse things” would be respected, a long-term suspension would be in no one’s interests.

And while Brexiteers have talked about informal talks on the withdrawal on trade deals before triggering Article 50, it seemed unlikely.

“No notification, no negotiation,” Merkel said. France and Italy also ruled out informal talks.

It became difficult to imagine who would actually press the Article 50 button, given how weak a negotiating position they would then have. But an alternative would mean overturning the result of the referendum.

Over three and a half million signatures were collected on a petition calling for a re-run, but it was proved many signatures were automated ‘bots’ or from abroad.

Health Secretary Jeremy Hunt, presumably testing the water for a leadership bid, said proposals would need to have “democratic endorsement”, either by another referendum or a general election.

David Cameron had already said there will be no second vote. French president, François Hollande, said: “What was once unthinkable has become irreversible.” Indeed, before the vote many on the Remain campaign stressed there was “no going back”. 

But where does this leave Nicola Sturgeon, attempting to negotiate with EU leaders despite not representing a sovereign state?

First up was talks with Irish president Michael Higgins, who was visiting Scotland. Then Fabian Picardo, Gibraltar’s chief minister, contacted the First Minister, telling Newsnight he hoped the territory could join Scotland in seeking special status. 

SNP MEP Alyn Smith received a standing ovation from his fellow MEPs in the European Parliament after he pleaded for allies.

“We will need cool heads and warm hearts. But please, remember this: Scotland did not let you down. Please, I beg you, chers collègues, do not let Scotland down now,” he said.

Before meeting leaders in Brussels, Sturgeon sought endorsement from the Scottish Parliament.  

“These are times that call for principles, purpose and clarity – in short, for leadership. That is why the vacuum that has developed at Westminster is so unacceptable,” she said.

“Politicians who proposed this referendum – no matter how bruised they feel by the result – have a duty now to step up to deal with the consequences of its outcome. And those who campaigned for a Leave vote – making a number of promises in the process – must now be clear and honest about their plans to deliver.

“One thing is clear: there cannot be three months of drift while both the government and main opposition parties at Westminster immerse themselves in internal elections.”

The Conservatives were awarded some space and time to overcome internal divisions by the Labour Party, who decided to use the EU referendum aftermath as the setting for a much anticipated and public coup against leader Jeremy Corbyn.

In unprecedented scenes, the vast majority of the shadow cabinet resigned in regular intervals over two days, clearly an orchestrated tactic to maximise coverage.

The exodus included the party’s only MP in Scotland, Ian Murray, the shadow Scottish secretary. “He’s a decent human being, a lovely man who I get on incredibly well with. But he just can’t lead the Labour Party and I don’t think the public think he can be Prime Minister,” the Edinburgh South MP said. 

Corbyn, elected on a landslide in September, was even accused of voting for Leave, something he had been campaigning against for months.

The mutineers among the parliamentary Labour Party kept the pressure on over several days, continuing the drip feed of resignations and some shouting “resign” at him from the green benches. And while Corbyn struggled to form a new, loyal shadow cabinet inside parliament, outside in Parliament Square, a crowd of around 3,000 Corbyn supporters gathered. “We’re not going anywhere,” shadow chancellor John McDonnell told the crowd.

But Corbyn faced a vote of no confidence the next day, in a split in the Labour Party not seen since the formation of the SDP in 1981. In total 176 MPs backed the motion to oust him, with only 44 backing their leader.

In Scotland, meanwhile, Sturgeon was calling for “unity and national purpose” in seeking discussions with EU institutions and political leaders., announcing the Scottish Government would be advised by a new standing council of experts chaired by University of Glasgow principal, Professor Anton Muscatelli.

The economist is joined by former European Court of Justice judge Sir David Edward, former UK ambassador to NATO, Dame Marriot Leslie, former chief scientific adviser to the President of the European Commission, Anne Glover, Charles Grant, director of the Centre for European Reform, David Martin, Labour MEP and Graeme Smith, General Secretary of the STUC.
The membership would remain flexible, Sturgeon said.

Scottish Conservative leader Ruth Davidson warned Sturgeon about the possibility of a second independence vote. People had contacted her ”worried about the prospect of another independence referendum”, she said.

“You don’t dampen the shockwaves from one referendum by lighting the fuse for another,” she added.

Scottish Labour leader Kezia Dugdale, who had also publicly joined calls for Corbyn to stand down, reacted furiously. “I struggle to put into words the anger I feel towards her party at the moment,” she said.

“An anger building from when David Cameron announced English Votes for English Laws within minutes of the Scottish independence referendum result. 

“An anger that grew when her party set Scottish voters against English voters in a hugely divisive and disingenuous 2015 campaign. 

“Anger at a party that forced this EU referendum on a country that did not want it only to resolve an ego contest in the Tory party. 

“And a Tory campaign in last month’s election that told the nation all that mattered was whether you were a unionist or a nationalist.”

Labour, said Dugdale, would support the Scottish Government’s attempts to build bridges with Europe.

“All options for protecting Scotland’s place in the single market must be explored, including a federalised United Kingdom which could see those nations of the UK which voted to remain retain membership or receive associated status.”

The support was not unconditional, she warned, adding MSPs may not get much of a break this summer. 

“It used to be said a week was a long time in politics. A day in British politics just now feels like a lifetime. In that context, two months is an eternity, and a recall of parliament cannot be ruled out.”