In the wake of Britain’s decision to exit the European Union, people around the world have been stunned. There has been daily speculation as to the cause, voters’ understanding of the referendum and what the next steps will be. Many feel that voters were not adequately educated about the consequences of leaving the EU. Without a true understanding of Brexit’s implications, a desire to rebel for rebellion’s sake shook up UK politics, and potentially caused what may be one of the most significant political events of the 21st century.
While it is impossible to say if that’s the true reason for the unexpected result, it is clear that British citizens were not well-educated about the referendum’s possible repercussions. In fact, The Washington Post stated that Google searches for “What happens if we leave the EU?“ more than tripled after the polls closed. “What is the EU?” became the second most searched question in the aftermath of the vote. Voting to leave what is arguably the most powerful politico-economic union in the world without understanding what it is that one is leaving seems to be a questionable decision to say the least. Yet, it happened.
Currently, referendums are ratified with a simple majority vote; but perhaps this is insufficient for something as significant as Brexit. Perhaps something along the lines of a super majority would be more appropriate for such an impactful decision, for instance a 75% hurdle or a 20% difference between the positions for the majority to be valid. This way, the will of the people would be more clear. The current closeness of the ‘leave’ and the ‘stay’ votes has generated a cloud of doubt over the decision. I do acknowledge that the use of a super majority brings its own questions of the arbitrariness of the hurdle. Another idea could be to conduct two votes spaced over six or twelve months so if the same decision is voted for twice the will of the people would be clearer. The knowledge gained from the research done after the first vote might have been reflected in the results of a second vote.
Regardless, what’s done is done, and Brexit is a reality. So what, really, are its implications? What actually happens if the UK goes through with removing itself from the European Union? Although it appears that an EU exit would spell disaster for Britain, that is not necessarily the case. In, The Economic Impact of ‘Brexit’: A Report by Capital Economics for Woodford Investment Management, it is noted that “Although the impact of Brexit on the British economy is uncertain, we doubt that Britain’s long-term economic outlook hinges on it” (source).
While the exit could have an initial short-term negative effect on productivity, there are many possible positive effects as well. Britain could save £10bn annually on funds it would normally send to the European Union budget as exports for financial services. Furthermore, Britain could benefit from a more tailored immigration policy, the ability to make personal trade deals and lower levels of regulation to its economic market. With respect to financial services, there is the possibility of a slight hit, but there are more long-term opportunities to benefit if Britain does indeed leave. Its departure may give it the opportunity
Ultimately, the results of the decision to leave remain uncertain. What is interesting however is the lesser discussed fact that there is no legal requirement to follow through on the Brexit vote. In past referendums, there has always been a legal clause binding the government to act in accordance with public opinion. Brexit? It turns out that was not the case (click for more here.) Of course, newly appointed Prime Minister, Theresa May, has stated her intent to honor the vote and cannot trigger political suicide by doing otherwise but the legal loophole allows her to negotiate a less aggressive withdrawal than some may be expecting. Time will tell.