The final countdown to next week’s landmark ‘in-out’ European Union (EU) referendum in Britain is now underway with a series of recent polls indicating sentiment is moving towards Leave. With the result of the June 23 ballot still highly uncertain, politicians and financial markets are actively exploring the ramifications of two key scenarios if Britain does vote to exit the EU.
The implications of a Leave vote will depend, in part, upon whether there is a strong vote to exit (55 per cent or more of the vote), or a much narrower vote (53 per cent or less). Both scenarios could trigger significant political and economic turbulence and most likely force the resignation of Prime Minister David Cameron — just a year after his landmark general election success last May, winning the first majority Conservative Government in more than two decades.
While the pathway forward from a strong vote to leave is relatively clear cut, there is significant uncertainty about what may arise from a more marginal vote to leave. While many voters believe that the latter outcome will definitely lead to Britain leaving the EU, the reality may be more complicated. In the event that Cameron does resign, in a marginal vote to leave scenario, it is far from clear that he, as an outgoing prime minister, will trigger Article 50 of the EU Treaties, which is the formal mechanism for bringing about the withdrawal process from the Brussels-based club. Instead, and given the massive stakes in play, he may leave this decision to his successor as Conservative leader and prime minister, who would be selected in an internal Conservative Party leadership contest that may not be finalised until this Autumn.
The favourites to win such a race will be former London mayor Boris Johnson and other key exit supporters, including Justice Secretary Michael Gove, although the prospects of some who favoured Remain, including Home Secretary Teresa May, who has largely stayed out of the referendum fray, and potentially Chancellor of the Exchequer, George Osborne, cannot be dismissed.
Once a new leader is in place, he or she will face a momentous decision that may take place in a context of significant economic volatility and political angst. In these circumstances, a second EU referendum in coming months could not be completely ruled out, not least if European partners make positive overtures and the new prime minister feels there is potential scope to cut a ‘better deal’ with Brussels. There are numerous precedents for such ‘second-bite’ referendums on key issues relating to the EU. Most recently, for instance, the Irish electorate voted in 2009 to overwhelmingly endorse the EU’s Lisbon Treaty only 16 months after having initially rejected it.
While both the Remain and Leave campaigns dismiss talk of a second referendum, Johnson (who polls indicate is most likely to become the next prime minister, especially in the event of an exit vote) had previously indicated his support for this approach. However, such a strategy will be a key risk for him or whoever becomes Cameron’s successor, and this will give much pause for thought as there are no guarantees that such a second vote could be won, given that many pro-Leave supporters would be furious and cry foul. In this scenario, therefore, it is quite plausible that the new prime minister will seek to engineer a general election if he or she believes the outcome will be favourable, potentially as soon as autumn, to try to secure a strong electoral mandate.
Strong challenge
While the current parliament theoretically runs to 2020 under the terms of the Fixed Term Parliaments Act, the new Conservative leader will be in a strong position to challenge opposition parties to support him in calling an early ballot given the change of prime minister, and the potential gravity of the situation facing the country.
Compared to this marginal vote to leave scenario, the circumstances of a strong vote to leave would be clearer cut. With 55 per cent or more of the ballot, the result will have more clarity and the prospect of a second referendum can be extinguished in the near term, with Cameron under intense, immediate pressure to resign as Prime Minister.
Although a strong vote to leave will most likely result in Article 50 of the EU Treaties being eventually triggered, Cameron (presuming he resigns) may potentially prefer to leave this to undertake to his successor, given that the new leader will head Britain’s exit negotiations with Brussels.
In these circumstances, the United Kingdom will have a two-year window to complete the withdrawal process, a timeframe that can only be extended with the unanimous consent of all other 27 members of the EU. Such exit discussions will be immensely complex, and potentially very difficult. So, before what can prove a mammoth undertaking, the new prime minister may well choose in this scenario to try and engineer a general election to give him or her a stronger mandate to win the best possible outcome in what is, in effect, a 27-1 negotiation with EU partners.
A final complicating issue here is that the terms of any eventual exit negotiation deal with the EU will have to be approved by the UK Parliament. However, there is currently a significant majority of members of parliament (MP) — including about half of Conservative MPs, and the vast majority of opposition ones too — who favour remaining in the EU. So, whether such an exit deal could ultimately get through parliament is far from certain and this could prompt further political uncertainty in the medium term.
Taken overall, both a strong or marginal vote for Leave can trigger significant political and economic turbulence, including the resignation of Cameron as Prime Minister. Especially, if there is a marginal vote for exit, a second referendum cannot be completely dismissed.
Andrew Hammond is an Associate at LSE IDEAS (the Centre for International Affairs, Diplomacy and Strategy) at the London School of Economics.
