Britain backs Brexit, Cameron to resign

Britain has spoken – and it has voted to leave the European Union, bringing an end to the premiership of David Cameron.

The sensational result – which confounded the eve-of-poll opinion polls and the betting markets – was announced early on Friday morning.

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52% of voters elected to Leave the European Union, while 48% opted to Remain. With a high turnout of 72%, early indications suggest that the Eurosceptic vote by blue-collar Labour voters has far exceeded expectations and proven a pivotal factor in the outcome.

So what happens next? While this unprecedented vote means no-one really knows, here are six things to look for over the coming days and weeks.

In Brussels: crisis talks

The Presidents of the European Commission, European Parliament and European Council, along with the Dutch Prime Minister, will meet on Friday morning, but can do nothing at this stage but acknowledge the result. The ball is in Britain’s court.

The leaders are likely to say that British people have spoken, that they respect their decision, but that it is common knowledge that for many years the UK has been a less than full-hearted member of the EU.

Donald Tusk has already said that the other 27 member states are keen to preserve their unity. Despite Euroscepticism in other countries, leaders may see this decision gives the EU a chance to redouble its efforts towards further integration and to restore a greater level of coherence to key policy areas.

All eyes will turn to the European Council meeting on 28 June, when David Cameron will have to explain his position and – most likely – face some angry fellow prime ministers – many concerned that Britain is just the first brick to tumble from the European edifice. The UK should expect no concessions.

Will Cameron trigger the now-famous Article 50 of the EU Treaty at the European Council? At the moment, it seems unlikely – at least so soon. Cameron said that he wants a new prime minister to deal with the negotiations.

A delay may suit some ‘Leave’ supporters who favour a more managed departure, some of the other 27 countries may push for the clause to be used, rejecting the idea that the UK can stay in the club to negotiate a better (exit) deal.

Brexit supporter Daniel Hannan MEP has backed a delay before invoking Article 50; Labour leader Jeremy Corbyn has said it must be deployed now.

Another possibility is that Britain is frozen out of EU discussions, deprived of voting power, its MEPs disenfranchised – the UK, in effect, having its membership of the EU suspended.

In London: Cameron resigns

Having called the referendum and campaigned vigorously for Britain to remain in the European Union, David Cameron announced his intention to resign at 08:20 BST on Friday morning.

Before the referendum, predictions from commentators and some politicians were that he would resign as Prime Minister should Britain vote to leave the EU, despite protestations to the contrary by Cameron and most Conservatives.

Despite a letter from around 80 pro-Brexit Conservative MPs telling Cameron that it was his ‘duty’ to stay on whatever the result, Cameron’s credibility was blown to pieces.

He will step down before the Conservative Party conference in the autumn.

Boris Johnson, a key figure in the Leave campaign, is popular among Conservative members but may not gain sufficient support among MPs to reach the head-to-head stage, when members vote.

Theresa May, who was a less-than-vocal backer of Remain, may be a good ‘unity’ candidate.

The rest of the political scene is in flux: Jeremy Corbyn’s lukewarm backing for the EU angered many pro-European Labour MPs. Some Labour MPs fear that the Party, which suffered a bad defeat in 2015, could lose a quarter of its seats with Corbyn as leader if there is a snap general election – something that is a distinct possibility.

But Labour’s problems run deeper: the referendum shows its disconnect with working-class voters who are concerned about immigration and voted Leave (and many of whom backed the UK Independence Party in 2015, and in the European elections in 2014.

For Ukip, it may be ‘job done’ – but Labour’s woes give a populist party a big opportunity, if it can speak to and win over working class voters. The party may have to decide where it positions itself on the political scale.

In Britain: turmoil and division ahead

Britain is a nation divided. Northern Ireland and Scotland voted in, as did London; the rest of England and Wales backed Brexit. And now the UK faces a constitutional crisis.

Nicola Sturgeon, Scotland’s First Minister, has indicated that Scotland being taken out of Europe ‘against its will’ would be a trigger for a second referendum on independence (the 2014 vote saw a 55%-45% in favour of staying in the UK). The Scottish National Party is already making noises about another independence vote.

Northern Ireland is perhaps more complicated, and potentially dangerous. Cross-border cooperation between Northern Ireland and the Republic of Ireland are a major element of the Good Friday peace agreement that helped end the ‘Troubles’ in Ulster.

Having both countries in the European Union made cross-border travel (which many people do daily) easier; now, it could be trickier. Irish nationalist party Sinn Fein wants its own referendum on Irish unity; the Irish government has warned of the grave consequences of the vote

Britain is also divided socially: young people favoured a Remain vote; older voters wanted to leave. University-educated people wanted to stay in; people with a school education wanted to leave. These divisions and wounds will take time to heal.

Economy: pound in freefall

The financial markets had bet on a Remain win, and the value of the pound sterling went up when a Remain vote seemed more likely at the start of the evening. Then, on the basis of poor results from the North-East of England, the pound plummeted, falling to a level not seen since 1985.

The signals are of poor investor confidence in the UK economy, and the potential for jobs to be at risk (although Leave campaigners note that exports will be easier).

The stock markets are likely to continue to fall – and this will have a big impact not only on business, but on the economy as a whole: on people’s mortgages, savings and pensions. The government will have some work to do to arrest the slide and restore some confidence.

Simon Derrick of BNY Mellon said: “Self-evidently a number of investors will have found themselves on the wrong side of the price action in the past few hours.

“It therefore look very likely that today will see a record fall for the pound, easily beating Black Wednesday’s move [when the UK fell out of the European Exchange Rate Mechanism in 1992 and interest rates hit double figures]. Indeed, it seems fair to say that today will soon start to be referred to as a Black Friday for markets.”

Geo-politics: pieces in flux

Is Britain the first domino to fall? The leader of the Dutch Party for Freedom has indicated that he wants a referendum on the Netherlands’ EU membership; there will be pressure in Denmark and France too. The fears in Brussels will be that the unity of Europe starts to unravel, putting economic stability and security at risk.

It would be a mistake to consider UK disenchantment with the EU as an isolated case. Opinion polls in all member states show a decline in support and trust for the political system in general and the EU in particular.

The EU must address the deep-seated socio-economic problems that have given rise to these negative perceptions as a matter of urgency, and bring forward appropriate policy solutions, if the EU is to survive and prosper once more.

Most world leaders will greet the result with alarm. But the biggest cheers are likely to come from Vladimir Putin, the Russian President. His view of Russian security is based in part on ensuring that Europe is weakened. Today, thanks to the British electorate, it is indeed that.

Politics: the post-factual era?

Populists have been on the rise in Europe, and beyond. In the United States, some academics have described the rise of Donald Trump – the presumptive Republican presidential candidate, who backed Brexit – as part of the ‘post-factual era’.

And indeed, part of that post-factual era was evident in the Vote Leave campaign, based on emotions – the idea of ‘taking back control’ – and exaggerated views of the UK’s contributions to the EU budget, the prospects of Turkish membership, and plans for a European army.

The Leave campaign had a better story, even with experts (of whom Michael Gove, a prominent Leave campaigner, said Britons had ‘heard enough’) and major institutions standing against it.

This was not only a vote against Europe; it was a vote against the political system, against immigration and against a perception of a changing identity in Britain.

The Brexit campaign had a slogan; it has its victory; now it needs to show it has a plan.

Download a briefing from Burson-Marsteller UK (PDF)

Words  David O’Leary (Burson-Marsteller Brussels) with David Harley, and Stephen Day (Burson-Marsteller UK)

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