Vote to leave EU causes shock waves

Posted on Jun 24th, 2016 | News and opinion

It will take many months – possibly even years – for the dust to fully settle, but one thing’s for sure: the EU referendum result is causing shock waves across the country.

Where the vote was won

Scotland returned a Remain vote majority of 62%, with none of its local authority areas having a Leave majority. Northern Ireland (55.8% Remain) and London (59.9% Remain) also returned a strong majority to stay in the EU.

But it was the Leave campaign that won most votes elsewhere, with the West Midlands voting 59.3% in favour of leaving the EU. The East Midlands (58.8% Leave), the North East (58% Leave) and Yorkshire & Humber (57.7% Leave), were other notable victories for the Leave campaign.

Prime Minister resigns

The one big casualty of this result is the Prime Minister, David Cameron. A Leave vote was always going to put his position in jeopardy, but few predicted it would happen so quickly. Within two hours of the official result being announced, he had declared his intention to resign. Boris Johnson is the bookies favourite to succeed Cameron, with Theresa May and Michael Gove also in the running.

Two Labour MPs have also submitted a motion of no confidence in the Labour leader, Jeremy Corbyn.

Many are predicting the departure of the Chancellor of the Exchequer, George Osborne, along with other prominent members of the Remain campaign. The Leave victory and Cameron’s decision to resign could also prompt an early general election later in the year.

World reaction

A joint statement issued by the European Council – signed by Donald Tusk (President of the European Council), Martin Schulz (President of the European Parliament) and other leading figures – read:

“In a free and democratic process, the British people have expressed their wish to leave the European Union. We regret this decision but respect it.

“We hope to have it as a close partner of the European Union also in the future.”

European leaders are, in general, highlighting the need for stability. But Sebastian Kurz, Austrian Foreign Minister, reacted by saying, “A domino effect on other countries cannot be ruled out.”

President Barack Obama is yet to make an official comment, but he was outspoken in his support for a Remain vote. President Vladimir Putin, who was in favour of Brexit, is also yet to comment.

Markets suffer losses

A vote to Leave was always going to cause ripples in the markets. Within minutes of trading opening for the day, the FTSE 100 dropped by over 8% and major banks suffered big drops – Barclays was hit initially with a 30% drop, though it’s now recovering some of this back.

Sterling also plummeted to a 30-year low, with £1 buying you just $1.32. As with the share prices, the pound is regaining some of its losses, albeit slowly.

Whether these are temporary blips or long-term consequences of the vote to Leave remains to be seen.

Scotland’s future

Following such a strong vote to Remain, Scotland’s First Minister, Nicola Sturgeon, has stated that a second independence referendum is “highly likely”. Speaking on the result, she commented:

“Scotland has delivered a strong, unequivocal vote to remain in the EU, and I welcome that endorsement of our European status.”

Impact on micro-businesses

It’s too early to say exactly how this result will affect micro-businesses. Negotiations on trade agreements and the overall exit strategy will begin, but how long this takes and what the outcome will be is a guessing game.

Jason Kitcat, Head of Policy & Public Affairs at Crunch, reacted to the decision to Leave, saying:

“We hope that the Government will move quickly following this result to set out its exit plans to minimise uncertainty for the business community.

“At the heart of negotiations to leave the EU must be how the growth and productivity of freelancers, contractors, the self employed, and entrepreneurs will be supported in the new settlement.”

What are your thoughts on the decision to leave the EU? Leave your comments below…

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Written by Jake Smith

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