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image001The European Union referendum delivered a startling result—but not a conclusion. Having voted to leave the EU, Britain faces more questions and uncertainty than it has for a generation and the drive to find solutions to those challenges has only just begun.

Britain’s new Prime Minster will face a dramatically changed political landscape, dominated by worries about immigration, the economy, the possibility of a second Scottish independence referendum and uncertainty over the nation’s international standing, the last of these having been dealt a series of hammer-blows by the judgments of the Chilcot report. All of these issues are examined in these pages.

As for the EU, before negotiations can begin, Jean-Claude Juncker, President of the European Commission, has said that Britain must trigger Article 50 of the Lisbon Treaty, which starts the two-year countdown to departure from the EU.

The question of whether to engage Article 50 raises profound constitutional questions. If there were a Commons vote to trigger the article, Parliament would effectively have decided to throw off a host of international obligations. Should Parliament simply vote itself more power in this way? And then Scotland. Nicola Sturgeon, the First Minister, is determined to keep Scotland in the EU, meaning that Article 50 could lead to the break-up of the country.

The significance of the article is hard to overstate. There is a case for holding a UK-wide vote on whether to trigger it. Once this is done and the EU negotiations begin, Britain will have to bargain with all 27 EU member states, each with its own political interests. Any change to the EU’s trade or other agreements with a post-Brexit Britain would require the assent of every EU member state—or put another way, a deal with Britain could be vetoed by any single EU country. This substantially weakens Britain’s bargaining power. |

There is no doubt that the EU is expensive, intrusive and in need of reform. Roger Scruton’s essay in this issue on the shortcomings of the great European project will give pause to many instinctive pro-Europeans. His argument that it cuts across too many deeply-held British beliefs of fairness and common experience is a strong one. Even so, the disengagement process—if it ever happens, and there is a growing argument that it will not—will take place in an environment of great instability. Lawrence Summers, the former US Treasury Secretary, told me recently that “There is a better than 50:50 chance, if a hard Brexit scenario appears in train, that a recession comes.” By early July, the pound had dropped to its lowest level since 1985 and the commercial property market was beginning to wobble. Britain was downgraded by several ratings agencies, and the Bank of England said that it was preparing to deal with a “challenging” period. That economic uncertainty cannot be dismissed. For the first time, the British electorate is beginning to see the potential consequences of leaving the EU. It seems fair that they—we—should have the right to decide, in a vote, whether or not we like what we see.

 

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