Brexit: the aftermath of the referendum

Researchers from across Goldsmiths, University of London continue to analyse and offer expert comment on the results of the recent referendum on the UK's European Union membership, and what it means for the future.

Here Professor Carl Levy, former professor of the Department of Politics and International Relations, writes on the aftermath of 23 June.

Events (as of 7 July 2016) are moving at a tremendous pace so it is quite hazardous to offer an assessment so early in the process of leaving the EU. Here are some telegraphic notes. I will not indulge in analysis of the referendum itself but discuss the situation at present. These are educated guesses and given the fact I thought Remain would win with 55%/45%, I would advise you have your salt shaker present.

1) We are in a treble-fold legitimation crisis: Parliament is overwhelming for remaining in the EU but the population voted 52-48% for leaving the EU. Both major parties are in flux and UKIP is leaderless. The constitutional position of both Scotland and Northern Ireland are open to question.

2) The party system: the Labour Party has been in a position of dual power since Jeremy Corbyn was elected as party leader. The aftershocks of the referendum have brought this to a head and I find it hard to believe that he will survive: he will either be eased out or the party will split and British politics with change quite dramatically. The Conservatives will most likely select Theresa May as the next PM, but this will merely open the second round in European warfare over a Norwegian type model of association or some sort of WTO/Canadian model. The currents within the party, however, are quite muddled. At the moment the Brexiter candidates (Leadsom and Gove) have taken a more liberal line on EU nationals living and working in the UK, with unconditional guarantees of their future status whereas the Remainer, May, will not reveal her hand until the future status of UK nationals in the EU is clarified. The crunch point for the Labour Party will be if an internal election is called because Corbyn does not resign. It will be very interesting to see how many members who joined in the last year and especially in the last weeks will support Corbyn. The other struggle is over the future of UKIP: how nativist will it go? Will the more liberal Carswell line prevail? Can the party remain coherent without the charismatic presence of Farage?

3) In any case, party politics is reliant upon the question of whether or not the deal struck with the EU will allow for a significant reduction of immigration into the UK. As is well known, a Norwegian road will not do this but as far as one can see, the EU will not allow full access to the SEM, and especially, the crucial ‘financial passporting’ facility without the endorsement of the Four Freedoms and a reduced ‘club fee’. With mounting pressure on the pound, an investment strike and the ricochet effect on the weak Italian banking sector, it seems difficult to imagine that whatever deal is struck that it will not be more ‘Norwegian’ than say ‘Canadian’. If that is the case, the net result of ‘gaining control’, will be that instead of the UK being a major player in a confederation of 28 sovereign nation-states, it will have no power over the formulation of policy and be at the receiving end of ‘fax’ or ‘email’ democracy.

4) Furthermore, a ‘Norwegian’ deal will lessen constitutional pressures in Scotland or Northern Ireland (bear in mind, these two case are rather separate and have different logics) because it would preserve the free movement of labour and not create a new border on the island of Ireland.

5) I find it difficult to imagine that the deal struck will not be the occasion for another referendum or a general election.

6) I also cannot see how these negotiations can drag on for two years without the British economy (and perhaps the European and indeed the global economies) not being battered.

7) Due to the effects of Brexit, austerity is over and the government might even discover the joys of Keynesian infrastructure developments (so the ghost of Labour might ‘enjoy’ a bittersweet victory!). But we are in uncharted territory, especially given the historically low bond yields, which do not bode well in the context of present global economy. At what point will foreign investors stop funding the UK? At the moment we may be witnessing credit crunch mark two, with Carney announcing new policies virtually every day but also telling us that the Bank of England is not superhuman.

8) If the answer is ‘Norway’ what happens to that section of the Referendum electorate who thought that Brexit meant net migration would be lowered below 100,000? And what about the magic money of the flexible £350 million pounds? Will UKIP get the same bonus that the SNP did in the wake of the Scottish Referendum in 2014? Will the current disgraceful increase in xenophobic and racist violence and threats increase further?

9) In terms of its position of the UK in the world, there will be slow and calibrated drift away of the US from the UK to Germany and France as favoured partners and one might also assume the other close friends of the UK, such as Sweden or the Netherlands will be less closer or at least ‘concerned’ for their British partners.

10) If the scenario does pan out on the less pleasant side, if the Labour Party can somehow come out the other end, reunited and with a more decisive leader (of whatever ideological persuasion) it might reap rich rewards. It certainly seems that many orphaned voters might be attracted to revived and beefed-up Liberal Democrat Party.

11) One can also imagine a rather interesting autumn with former Remain forces fighting a rear guard action on three fronts. There will be legal and political challenges over how one disentangles 40 plus years of EU legislation and figures such as Sturgeon and other mobilising forces in the regional parliaments and in Westminster will mount political challenges. There will be ferocious and constant public and private lobbying of the government by the City, by manufacturers, by universities etc. There will be mounting mass mobilisations against leaving or watering it down, if the economy suffers and racial and xenophobic violence remains high or increases. There may also be increased street tensions between the Leavers and former Remainers if multiply economic, constitutional and political crises persists.

12) Caveat emptor. Let’s see how wrong I am this time!