Brexit: What are the likely scenarios?
A second referendum may have to be held if the ‘leave’ camp manages to win with a small margin
The final countdown to n e x t w e e k ’ s l a n d ma r k “in-out” European Union referendum in Britain is now under way, with a series of recent polls indicating that sentiment is moving toward “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 votes to exit the EU. The implications of a leave vote will depend, in part, on whether there is a strong vote to exit (55% or more of the vote), or a much narrower vote (53% or less). Both scenarios could trigger significant political and economic turbulence, and most likely force the resignation of Prime Minister David Cameron only a year after his landmark general election success last May, winning the first majority Conservative government for more than two decades.
Although the path 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. For although 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 whether he, as outgoing prime minister, would trigger article 50 of the EU Treaties, which is the formal mechanism for bringing about the withdrawal process from the Brusselsbased club.
Instead — and given the massive stakes at play — he may leave this decision to his successor as Conservative leader and prime minister, who would be selected in an internal leadership contest that may not be finalised until later this year. The favourites to win such a race would be f o r me r London mayor Boris Johnson and other key exit supporters, including the justice secretary, Michael Gove. But the prospects of some who favoured “remain”, including the home secretary, Teresa May — who has largely stayed out of the referendum fray — and, potentially, the chancellor, 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 believes 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 overwhelmingly in 2009 to endorse the EU’s Lisbon Treaty, only 16 months after having initially rejected it.
Although 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. But such a strategy would be a key risk for him or whoever becomes Cameron’s successor, and this would 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 would seek to engineer a general election if he or she believes the outcome would be favourable, potentially still this year, to try to secure a strong electoral mandate.
Although the current Parliament theoretically runs to 2020 under the terms of the Fixed Term Parliaments Act, the new Conservative leader would be in a strong position to challenge opposition parties to support him or her in calling an early ballot, given the change of prime minister and the potential gravity of the situation facing the country.
Compared with this marginal voteto-leave scenario, the circumstances of a strong vote to leave would be clearer cut. With 55% or more of the ballot, the result would have more clarity and the prospect of a second referendum could be extinguished in the near term, with Cameron under intense immediate pressure to resign as prime minister.
Although a strong vote to leave would most likely result in article 50 of the EU Treaties being eventually triggered, Cameron (presuming he resigns) may potentially prefer to leave this to his successor to undertake, given that the new leader would head Britain’s exit negotiations with Brussels.
In these circumstances, the United Kingdom would have a two-year window to complete the withdrawal process, a timeframe that can only be extended with the unanimous consent of all the other members of the EU.
Such exit discussions would be immensely complex and potentially very difficult. So, before what could prove a mammoth undertaking, the new prime minister may well choose in this scenario to try to 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 would have to be approved by the UK Parliament. Currently, however, a significant majority of MPs — including about half of Conservative MPs, and most opposition MPs too — 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 a marginal vote-to-leave result could trigger significant political and economic turbulence, including the resignation of Cameron as prime minister.
If there is a marginal vote for exit, a second referendum cannot be completely dismissed, especially if the result of the ballot prompts significant economic volatility.