Brexit: Certainties, Uncertainties and Article 50

There is no doubt that the outcome of the UK's referendum to leave the EU creates a sustained period of uncertainty for the UK, for other European countries and for the European Union itself. Amongst that sea change it is important to be reminded of some certainties in the short to medium term.

5th July 2016

There is no doubt that the outcome of the UK's referendum to leave the EU creates a sustained period of uncertainty for the UK, for other European countries and for the European Union itself. Indeed, the UK's own constitutional settlement with its constituent parts is being re-examined and could be subject to further change.

Some big questions are yet without answers: 

  • Who will lead the negotiations for HM Government? 
  • Who will be in government? 
  • What will they seek to negotiate? 
  • What is actually achievable and palatable? An EEA-deal? A separate free trade deal? No deal and relying on WTO rules?
  • Will there be a second Scottish Independence Referendum? 
  • What will the role of the devolved governments be in any decision to leave the EU?
  • Will there need to be a decision by the UK parliament to trigger the withdrawal? What is the role of parliament in any re-negotiation and approval of any new settlement?

The scale of this potential change is unprecedented and businesses are scenario planning for different outcomes.  

Amongst that sea change it is also important to be reminded of some certainties in the short to medium term:

  • The UK has not left the EU yet. All laws, rules, regulations and all rights and obligations continue to apply this week as they did last week. 
  • The UK has not yet even made an application to leave the EU under Article 50 of the Treaty on European Union.
  • The only immediate and automatic effect of the Leave vote is that the UK's renegotiated settlement agreed at the start of the year has become void and will not come into effect.
  • Making an application to leave the EU under Article 50 will not change this. All rules will continue to apply until the UK has actually left the EU.
  • Making that application under Article 50 will trigger a negotiation between the UK and the EU. There is a longstop date of two years from the date of making the application. This can be extended (if all other member states agree) but if they don't then the expiry of time will terminate the UK's membership.
  • It is up to the UK to trigger the mechanism under Article 50. Moreover, until a final exit from the EU (either by agreement or the expiry of the two year period) the UK could withdraw from the Article 50 procedure. Obviously, that would involve a huge amount of politics but we already see some of it unfolding.