Brexit Wins – What Happens Now?

Wow, they say a week is a long time in politics and the decision to leave the EU is a true testament to that it was only on the 23rd June 2016 that Britain’s majority chose to exit the EU – a decision that’s caused a lot of worry and uncertainty. However, it’s also brought with it a level of hope and elation for those who voted to leave. The main question is, what happens now that Brexit has won the vote? I purposely waited before writing this article as things seem to be changing daily.

While officially the UK isn’t due to be out of the EU for another two years, there has already been a call for the country to exit as early as possible. If you’re wondering how exiting the EU is going to affect the country moving forward, below I’ll discover some of the current predictions.

New leadership for a country divided

Of course, the decision to leave the EU wasn’t the only shock to come on the day of the results. Prime minster David Cameron, resigned from his post and is due to step down in October. This has caused further uncertainty as to who will take over the leadership of the country, with Boris Johnson initially being one of the key players.

However all that changed in a matter of days. Boris ruled himself out, Michael Gove ruled himself in and Andrea Leadsom came from left field to announce her candidacy.

Johnson had welcomed the Brexit vote with open arms, stating it’s a glorious opportunity for the UK to find its place in the world once again, however it hasn’t appeared to prove such a glorious opportunity for his career .

As of yesterday the battle for the top job will be contested by Teresa May and Andrea Leadsom, a week in politics indeed.

A second shock came as Scotland look to separate themselves from the rest of the UK. The majority of Scots voted to remain in the EU so if the country does go back to the polls and win the vote to separate itself, it would attempt to go on and re-join the EU. To be fair we are a long way from that but the glint in Nicola Sturgeons eye was palpable the day after the Brexit decision when she realised it opened the door for a new Scottish referendum

Jeremy Corbyn meanwhile, has been urged to resign and lost the support of 172 MPs in a No Confidence motion. However, he’s so far refusing to let down his supporters by giving up his position. So for now, it seems the Labour leader is standing strong against the masses, but for how long, only time will tell.    

Britain is actually the first country to exit the EU, which is why there has been so much uncertainty surrounding how it works and what will happen. All that’s really known at this stage is that the UK now has to follow the rules laid out in Article 50.

What is Article 50?

There isn’t actually much published about Article 50. All you really need to know is that it is part of the Lisbon Treaty and it consists of the rules a state needs to adhere to in order to exit the EU.

It is only once Article 50 has been triggered that the two-year countdown to exit begins. First, the European Council needs to be notified of the decision. Then negotiations follow to create an agreement on the withdrawal terms and the future relationship between the country and the EU.

Answering the big, burning questions

After the vote to leave, there are a lot of burning questions people have in terms of what will happen. Here we’ll look at some of the most common…

How will Brexit affect the economy? 

By far one of the biggest concerns UK citizens now have, is what’s going to happen to the economy? Initial news after the vote wasn’t exactly encouraging. In fact, there’s even been talks of another recession. This hasn’t been helped by the plummeting value of the pound as any large currency fluctuations cause market uncertainty

It has been said that a lot of major businesses have headquarters in the UK because the country was part of the EU. So now it’s not, there is some uncertainty as to whether businesses will relocate. This would obviously lead to a loss of jobs and have a serious impact on the economy.  There are already some indications that Germany has started wooing small to medium sized UK based business to move to the centre of Europe i.e. Germany.

Some sectors will probably be hit harder than others, such as manufacturing. The manufacturing industry currently relies heavily on European trade. As part of the EU, businesses were given discounts on trade prices. So the potential increase in costs could become problematic.

There is also a skills gap in the UK within the sector so many manufacturing companies rely upon non-British workers to come in and fill that gap. This may be further exacerbated with Teresa May and Andrea Leadsom having opposing views on what’s actually going to happen to the EU immigrants who are already currently in the country.

However, it’s not completely bad news as the decrease in the value of the sterling could encourage other countries to take advantage of the cheaper prices. Trade policies may also need to be adjusted, which could lead to less red tape and much faster decisions.

Finally there’s the worry about the cost of food. It’s been widely advertised that the price of the weekly shop will increase. Being part of the EU meant the UK received a discount on food and produce imports. However, anti-EU campaigners have said this is rubbish and despite the claims, the cost of food isn’t likely to increase.

What about immigration?

Immigration has played a key part in the Brexit. Now the UK is out of the EU, there’s going to be a crackdown on its borders. This means fewer people will be able to come into the country. There’s talk it could even adopt Australia’s rules on immigration, only accepting those who can contribute where there are skill shortages.

So immigration isn’t going to stop entirely, but it is set to become a lot more controlled. As part of the EU, citizens from other EU countries were able to freely come and go. Obviously that is not going to be able to happen now so there will be fewer immigrants from the EU coming in. Of course, that also means UK citizens will no longer be able to come and go to other countries freely either. 

So what happens next? Truthfully, it’s very hard to tell. As the UK is the first country to exit the EU, it’s completely new territory. There’s a lot of uncertainty about the future of the country and that is unlikely to settle down anytime soon. In my humble opinion it would be useful for the country to take the EU leaders up on their advice to begin an exit strategy as soon as possible. That way, things will start to become clearer much quicker. At the moment it’s more of a waiting game.

Written by European Sales Director at Vernacare and CEO of consulting business Hands Associates Ltd - Hakeem Adebiyi 

Read Hakeem's previous blog - Exporter Insights - The Pros and Cons of Staying in the EU - https://www.rmg-uk.com/blog/exporter-insights-the-pros-and-cons-of-staying-in-the-eu-/ 

https://www.rmg-uk.com/blog/exporter-insights-the-pros-and-cons-of-staying-in-the-eu-/