BREXIT: What happens next - an unbiased briefing

Votes have been cast and the champagne corks popped.  The “Leave” Campaign will be celebrating the close win with a 1.9% margin (which equates to just 318,900) votes of a 33.6m turnout.

So, the party will be over soon and the effects will be felt.  Irrespective of your choice, this is an unbiased and factual briefing on what happens next.  This choice will affect this generation in terms of economic impact in the short term, but it will be the next generations that will truly feel the impact of this decision as it will take a significant amount of time to recalibrate under our own terms, new trade agreements and revised polices.  I have listed some key bullets below and then elaborated them in the rest of the post: 

• The pound is now at its lowest level since 1985.
• UK is likely to lose its AAA credit rating.
• Article 50 is likely to be invoked by the remaining members of the EU giving UK 2 years to exit.
• It is likely that it will take 5 years for UK to create new trade agreements, that will mean that these negotiations will occur over 2 successive governments where opinion could vary greatly.
• There have been some calls for PM David Cameron and Labour Leader Jeremy Corbyn to resign.
• Other countries Far Right and Far left groups have now started calling for their own referendums.

Firstly, the economy.  What we do know is that the Pound crashed to the lowest level since 1985 as sterling fell below $1.35. Complacency about a Brexit outcome will come clear later this morning, as out of hours trading suggests that the FTSE 100 will drop by 8.8pc, or by some 560 points. The fall would be the third worst in history if stocks ended the day down as sharply. 

 The chief ratings officer for credit agency Standard and Poor’s says the UK is likely to lose its AAA credit rating.  The impact will mean greater interest rates and more national debt as we borrow money as a nation.

Moritz Kraemer told the Financial Times: “We think that a AAA-rating is untenable under the circumstances.”

Moving to Politics, Laws and Regulation.

So Article 50……..have you heard of it?  The rules for exit are contained in Article 50 of the Treaty of Lisbon – and they are brief.  No state has left the EU before, we are in unchartered territory.

 Today, Martin Schulz, the President of the European Parliament, will meet the Conference of Presidents at around 8.30am, to agree a common position from MEPs. They are expected to demand that Article 50 is triggered immediately, to prevent months of uncertainty.

At 10.30am, the four most powerful men in Brussels – Donald Tusk, president of the Council, Jean-Claude Juncker of the Commission, Mark Rutte, the Dutch premier who holds the rotating presidency of the Council, and Mr Schulz meet. They will speak afterwards.

Mario Draghi, the president of the European Central Bank, has said it is ready to intervene to steady the markets. Central bankers from Japan to Switzerland have also offered to step in to provide additional liquidity - a measure not seen since the financial crisis. 

On Saturday, the foreign ministers of the founding six member states – France, Germany, the Netherlands, Luxembourg, Italy and Belgium – will meet to discuss the implications of the British vote.

Britain will be under intense pressure to activate Article 50 and commence exit negotiations. Leaders do not want to be drawn into months and years of haggling over Britain’s status: “Out is out,” Jean-Claude Juncker said on Wednesday.  Angela Merkel has also said that there will be “no special treatment” for the UK.

 Also on the agenda is a discussion of the migration crisis, including tentative proposals for “compacts” to speedily deport migrants back to Africa and the current deployment of naval craft off Libya to intercept smugglers. Britain has a major role in this – a British warship is deployed in the EU’s naval operation and a second has been promised – but the crisis takes a back seat.

Triggering Article 50, formally notifying the intension to withdraw, starts a two-year clock running. After that, the Treaties that govern membership no longer apply to Britain.  The terms of exit will be negotiated between Britain’s 27 counterparts, and each will have a veto over the conditions.

It will also be subject to ratification in national parliaments, meaning, for example, that Belgian MPs could stymie the entire process.

Two vast negotiating teams will have to be created, far larger than those seen in the British renegotiation. The EU side is likely to be headed by one of the current Commissioners.

Untying Britain from the old membership is the easy bit. Harder would be agreeing a new trading relationship, establishing what tariffs and other barriers to entry are permitted, and agreeing on obligations such as free movement. Such a process, EU leaders claim, could take another five years. 

One option will be to simply recreate EU laws as British statute. But Civil Service insiders expect a new Brexit government to opt for something much more radical, and to use the opportunity of “throwing off the shackles” to re-regulate Britain.

It means that the Government would have to do three acts simultaneous: negotiate a new deal with Brussels, win a series of major bilateral trade deals around the world, and revise its own governance as EU law recedes.

Running the show would be an effective “Ministry for Brexit”, under a senior minister.

Officials expect the scrapping of EU law could result in an avalanche of new legislation in every corner of Whitehall – perhaps 25 Bills in every Queen’s Speech for a decade.

Hundreds of Treasury lawyers and experts would have to be hired for areas – such as health and safety, financial services and employment – where Britain had lost competence to Brussels. Meanwhile, a Trade Ministry will be required, with hundreds of new negotiators, to establish new deals around the world. 

This all has a huge cost.

Jeremy Corbyn has provoked a furious backlash from Labour MPs after calling on the Government to immediately start the process of withdrawing from the European Union.

The Labour leader said that Article 50 needs to be "invoked now" in response to the EU referendum result because "many communities are fed up with cuts and economic dislocation.

Labour MPs, who repeatedly warned that Mr Corbyn was failing to do enough during the referendum campaign, said he was "absolutely crazy".

It comes after a leaked Labour script claimed that Jeremy Corbyn is "uniquely placed as a critical Remainer" to help unify Britain in the wake of the referendum.

His comments led to accusations that he is "delusional" and led to open calls for him to quit from Labour MPs and party members.

Mr Corbyn said: "Article 50 needs to be invoked now. Many communities are fed up with cuts and very angry. The message is that many communities are fed up with cuts and economic dislocation. Clearly there are very difficult days ahead. There will be job consequences."

Prime Minister, David Cameron is under immediate pressure to quit as Prime Minister following the vote to quit the European Union.

Despite more than 80 Conservative MPs signing a letter saying Mr Cameron has a “mandate and a duty” to remain in post, scores of Conservatives now believe he cannot stay in Number 10 for long.

Hilary Benn, Labour’s shadow foreign secretary, and Nigel Farage, the Ukip leader, are among leading opposition figures who have already said Mr Cameron will have to leave office.

It seems likely that there will be a race for the Tory leadership within months, with pro-Brexit politicians Boris Johnson and Michael Gove expected to be the favourites.