Brexit: Five Things You Should Know
A week after the British public voted to leave the European Union, Chatham House experts summarise the five key things to know about the result.
(1) Brexit means Brexit.
While the referendum result is not legally binding, it is effectively politically binding and has been accepted as such by the Conservative Party leadership candidates. The result could only be overturned as a result of a parliamentary vote or a general election. The former would be extremely unpopular with the electorate, while the latter now seems unlikely, with both Theresa May and Michael Gove ruling out an early election if they become the next Tory leader.
(2) The vote was driven by inequality.
In the 20 local authorities where support for Remain was strongest, 45% of voters have a university degree; 42% are professionals; 26% describe themselves as non-white; only 11% are pensioners; and the median income is £27,000.
By contrast, in the 20 local authorities where support for Leave was strongest, only 16% of voters have a degree, only 23% are professionals; less than 5% describe themselves as non-white; nearly 20% are pensioners and the median income is just £18,000. Read more
(3) A second Scottish independence referendum will be hard to avoid.
The collapse in the oil price and the still-troublesome issue of currency are thorny issues for Scottish nationalists, but the divergence in the referendum result in Scotland (which voted strongly for Remain) and England and Wales (which voted decisively for Leave) bolster their case that Scotland is a distinct political community with a different vision for its future. A Brexit would also almost certainly constitute a ‘material change of circumstances’ in Scotland’s position within the UK, which was a criteria for a second referendum.
(4) Britain will be poorer for some years to come.
The market’s reaction to the vote has been extremely volatile, with the pound falling in value from $1.49 to $1.33 at the time of writing. Rating agencies Standard & Poor’s and Fitch have downgraded Britain’s credit rating to “AA” (from “AAA” and “AA+” respectively) due to what the former called a “less predictable, stable, and effective policy framework in the U.K.” The real economy looks equally vulnerable. A survey of Institute of Directors members found that a quarter are planning to freeze recruitment; 5% are planning redundancies and one in five are considering moving some of their operations outside the UK. Read more
(5) Further exit referendums across Europe are unlikely.
The vote gave some momentum to anti-EU parties across the continent — particularly in France and the Netherlands — but it is highly unlikely that any pro-EU leader will now be willing to take the gamble of holding a referendum, having seen how badly it worked out for David Cameron.
