Brexit—The Final Countdown

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Tetra Strategy, political consultancy and public affairs service, look at the potential outcomes of the EU referendum and provide a report which looks at the possible political and economic consequences in the event of a Brexit vote.

The Final Countdown

After months of debate the EU referendum is finally in its closing stages. Regardless of the result, this is a momentous decision for a country not that well versed or comfortable in such a display of people power. The Electoral Commission reported yesterday than an unprecedented extra two million people registered to vote in the early parts of 2016 in order to take part in the referendum

It is going to be a nervous wait until the small hours of Friday morning to see how the UK has voted.  Ballot papers are being counted overnight starting when polls shut at 10pm on Thursday. It is likely that results will start to trickle in shortly after midnight with the bulk of declarations between 3am and 5am.

So what should we look out for?

  • Polls show it is still a close election – the opinion polls show that it is still too close to call. Most recent polls show the momentum of recent weeks for the Leave campaign has stalled. The betting markets are strongly backing the UK voting to stay in, but the truth is no-one knows what the result will be. It is extremely possible that Britain will wake up on Friday morning to the new world of a Brexit vote. All eyes will be on the Prime Minister as the results become known. David Cameron was quick to stride out in front of Downing Street in the hours immediately following the Scottish referendum. He was able to claim victory in that vote. This time there will be a lot of nail biting inside Downing Street. If the UK votes for Brexit all eyes will be on what the Prime Minister says. Will he stay or will he go?
  • Market response - the formal declaration of the result is expected around 8am, just around the time the London Stock Exchange opens. The pressure will be huge on the Prime Minister to reassure the markets if the UK votes for Brexit. In the event of Brexit, sterling is almost certain to fall steeply and will put pressure on interest rates, we could see emergency statements from the Bank of England and EU financial ministers.
  • Bringing the Tory family back together- a political drama will also be unfolding alongside the financial fallout. The victory speech for a Brexit win will be delivered from the Manchester count by Labour’s Gisela Stuart MP, the official head of the Leave campaign. No formal announcements are expected from Boris Johnson MP or Michael Gove MP until after the Prime Minister has responded to the news. The drama doesn’t end if Britain votes to remain in the EU. Given the scars of the campaign trail will the Prime Minister use the hours after a Remain victory to reshuffle his Cabinet and shorten the political careers of Brexit opponents like Boris and Gove?One of the more remarkable elements of the referendum campaign has been the so-called ‘blue-on-blue’ action with leading Ministers slugging it out against each other live on the nation’s airwaves. It is going to be a tough act to bring the Conservative family back together. Even if he wins David Cameron will come under pressure to announce the date of his departure as Prime Minister and may well face a leadership challenge from disgruntled rebels.It is difficult to see many scenarios whereby the Prime Minister remains in post if the UK votes for Brexit. It is likely that David Cameron would announce his resignation by Friday afternoon but remaining in office in the immediate term, both to manage the fallout from the vote and to allow a successor to be chosen.
  • Start of the long goodbye for Labour- whilst much of the media attention has focused on internal Conservative battles, this has not been a good campaign for the Labour Party either.  Despite concerns over the virility of Jeremy Corbyn’s defence of Europe, Labour is a party almost entirely united around the European project. Yet anecdotal stories from Labour MPs and opinion polls tell the same story: the uprising of many traditional Labour and working class supporters behind the Leave campaign. Thursday could see a staggering rebuff for Labour with a big Brexit vote in some of its most traditional heartlands. UKIP are already chasing Labour in many areas. Expect to see UKIP highlighting its support in Labour’s heartlands as a breakthrough regardless of the overall result. Just as Scotland’s working class voters fell out of love with Labour, there is much to worry the party coming out of Thursday’s vote.

If the UK votes to leave the European Union it will be unchartered territory. No Member State has voted to leave the EU before. The financial fallout and impact on the economy will be significant, at least in the short-term. There is also the formal process of negotiating an exit agreement with the EU. Whilst the level of risk has been the subject of much debate during the referendum campaign, the uncertainty a Brexit vote would create has gone undisputed. This Report produced by Tetra Strategy provides an overview of what happens next if the UK votes to leave the EU. It looks at the formal process that will be followed within the EU and next steps for Brexit, as well as possible political and economic consequences in the UK.

Tetra Strategy provides political consultancy and public affairs service to companies, varying from multi-nationals to SMEs. For regular updates like this and to find out more please visit www.tetra-strategy.co.uk  

 

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