June 22, 2016
On Thursday, voters across the United Kingdom will go to the polls to decide whether or not Britain remains a member of the European Union. While many European Union member states hold regular plebiscites on treaty changes, the referendum represents the first time since 1975 that UK voters will have a direct say over Britain’s relationship with Europe.
With less than 48 hours to go until polling stations open, opinion polls remain too close to call. The latest polls conducted for ORB and the National Centre for Social Research show the narrowest of leads for Remain, while YouGov puts Leave narrowly out in front.
In this Snapshot, FTI Consulting will summarise the process by which votes will be counted and the process by which the UK’s exit from the European Union could be triggered in the event of a Leave vote.
In the case that Britain votes to remain a member of the European Union, the Prime Minister will have to face down a number of challenges on a domestic and EU level.
In Brussels, the Government’s efforts will turn to securing the full implementation of the UK’s renegotiated settlement with the EU that focuses on exempting Britain from the EU’s aim of “ever-closer union,” strengthening protections for non-Eurozone countries and ensuring the implementation of the seven-year limit before migrants can access in-work benefits. While the European Commission and EU governments are expected to honour the deal, elements within the European Parliament are seeking means by which to derail the package.
On a domestic level, the Conservative Party is badly divided on the issue of Europe, with 140 of the party’s 330 MPs having publicly declared for Brexit. While the bulk of these MPs would be content to draw a line in the sand following a “Remain” vote, a vocal minority are likely to make life very difficult for the Prime Minister and the Government’s ability to progress contentious legislation. With David Cameron having already pledged to stand down as Prime Minister before the 2020 election, his pro-Brexit detractors may well use a weak Remain vote as grounds to force a contest sooner rather than later.
Regardless of what happens on Thursday 23rd, the battle to become the next leader of the Conservative Party will effectively commence on Friday 24th.
If Britain votes to leave the European Union, the precise process via which the country’s exit from the European Union will be facilitated still remains somewhat vague. Indeed, not wishing to pre-empt an issue he is desperately keen to avoid, Prime Minister David Cameron has been purposefully evasive when asked the specific means by which British exit from the EU would be necessitated.
Nevertheless, the formal legal mechanism for an EU Member State to leave the organisation, as defined by the Treaty on Functioning of the European Union (Article 218(3)), is to trigger ‘Article 50’ which states that “any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements”.
In order to trigger Article 50, a Member State must notify the European Council of its intention; with the EU subsequently entering into negotiations in order to conclude an agreement setting out the arrangements for the country’s withdrawal and taking account of the framework for its future relationship with the EU.
The UK’s negotiations would be led by a ministerial working group; logically spearheaded by the Treasury. EU treaties will cease to apply to the Member State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification. Scope does exist, under Article 50 (3) to extend this two year period if the European Council “unanimously decides to extend” by a specific amount.
Any negotiated settlement will require the agreement of the European Parliament and European Council, operating on the basis of a qualified majority vote.
The result of the referendum ought to be known by 05:00 on Friday morning – some time in advance of the opening of Europe’s financial markets.
Regardless of whether the United Kingdom has voted for Britain to leave the European Union (a final declaration is not expected until around 06:30), the Prime Minister is expected to make a formal statement at Downing Street before financial markets open.
In the case of a Remain vote, the Prime Minister will seek to avoid triumphalism and instead focus his remarks upon both the relative closeness of the result and the strength of British antipathy towards the European institutions; calling for continued reform to the European Union and the honouring of pledges received during the renegotiation round.
In the case of a Brexit vote, the Prime Minister’s remarks would focus upon the need for an orderly and constructive dialogue with European heads of government on the form initial negotiations should take. We would not expect, at this time, the Prime Minister to outline any specific policies or commitments regarding the Brexit process.
Prior to European markets opening, statements will be issued by HM Treasury, the Bank of England, the European Central Bank, US Federal Reserve and numerous other national central banks and/or regulators containing language designed to assuage concerns about Brexit.
By this time, formal statements responding to Britain’s decision to leave the European Union will have been issued by European Council President Donald Tusk, European Commission President Jean-Claude Juncker and national leaders such as German Chancellor Angela Merkel and French President Francoise Hollande. While such statements would be expected to strike a disappointed tone, they would likely stress respect for the British public’s decision and mirror the Prime Minister’s call for “constructive dialogue”.
Following an initial round of statements from the leaders of other European nations and the European institutions themselves, rumours about specific punitive measures to be adopted against the United Kingdom would probably find themselves gaining traction.
On a UK domestic level, the Prime Minister’s political opponents would probably have begun calls for his resignation from office.
These calls would be rebuffed by a number of his pro-Brexit Cabinet colleagues, most notably the Justice Secretary Michael Gove, yet would gain considerable traction amongst backbench Conservative MPs during the course of the day.
Following a politically restless weekend in the United Kingdom in which the Sunday newspapers would be filled with speculation about the future of the Prime Minister and the prospects of potential leadership challengers, talk would move to the mechanics of Brexit.
A European Council meeting is due to take place in Brussels on Tuesday and Wednesday next week. In the event of Brexit, this will be David Cameron’s first meeting with other European heads of government – and would be expected to dominate the agenda. The most pressing issues to be addressed at this juncture would be organisational ones; largely focusing upon Britain’s participation in future European Council meetings and the probity of the United Kingdom continuing to cast votes on EU policies under the Qualified Majority Voting procedure.
The Prime Minister would be unlikely, however, to formally trigger Article 50 as this would mean an automatic termination of the UK’s ability to participate in all discussions of the European Council – removing a vital bargaining chip. It is possible, however, that the Prime Minister would face pressure from other European leaders to lay down a more explicit timeline for Brexit. It is expected that, at the conclusion of the head of government meeting, a statement would be issued reinforcing willingness to reach a “proportionate” deal between the United Kingdom and the remaining EU members. Behind the scenes, however, pitched battles would be underway between the UK’s allies in Council, such as Poland and Germany and states such as France and Spain, that would probably seek to water down any post-Brexit settlement seen as beneficial or advantageous to the UK.
Following the conclusion of the heads of government meeting, the House of Commons would sit in order to debate the outcome of the referendum and potential next steps for the UK. Given that 450 out of 650 Members of Parliament favour Britain remaining in the EU, some MPs would be expected to call for the referendum result to be disregarded.
Regardless of the goodwill that any initial negotiations may take, European Union member states would be unwilling to allow the United Kingdom an indefinite period in which to negotiate the logistics of their departure. Clear timelines will be expected from the UK Government.
The summer months would provide for a period of subtle, behind-the-scenes negotiations between UK Government ministers and individual heads of government as to the potential composition of any future relationship between Britain and the European Union.
Following the UK Government and other key capitals being content that the debate over the renegotiation had been framed in an appropriate manner, it is likely that the triggering of Article 50 would follow before the end of the year. Only at this juncture would substantial negotiations commence regarding any possible trade deal between the United Kingdom and European Union, the future of freedom of movement provisions and other pan-European policy challenges such as environmental targets and cross-border energy trading.
As in the case of British general elections, the process of counting votes will commence immediately after polling stations close at 22:00.
At 22:00, police vans will collect boxes from each polling station and transport them to the designated counting hall for each local authority. This will usually be a sports hall or similar venue large enough to accommodate the legion of official counters (who are often bank workers or other individuals used to counting large amounts of paper at speed) and official scrutineers appointed by the Leave and Remain teams.
When the votes arrive at the counting hall, they will enter the “verification” stage where counters will check that the number of ballot paper in the boxes tallies with the number issued. When they are content that this is the case, the counting of Leave and Remain votes will commence.
The referendum is expected to have an extremely high turnout – more than 80% in many places – yet, due to it only being a binary choice, will be relatively easy to count.
The results will formally be declared on a regional basis, with Northern Ireland and the North East – the United Kingdom’s two smallest regions – expected to declare first. London and the West Midlands are expected to follow next. While the South East is the largest region, Scotland is expected to be the final area to declare due to the need to transport some votes via helicopter or boat from outlying islands.
No individual regional result will be declared until every local council has completed its counts and the formal, national result will not be declared until every single council has finished. In reality, however, the result of the referendum will be known some time in advance of the formal national declaration of the poll.
Each local authority counting area will declare its vote tallies on a local level; meaning they will be fed into national running tallies run by media organisations on a rolling basis.
The first local authorities to declare their results will do so around midnight, with more than 80% expected to have done so by 04:00. As such, barring an exceptionally close result, the result ought to be clear long before Britain rises for breakfast.
Furthermore, during the Scottish independence referendum, the Returning Officer chose to make an unofficial declaration of a “no” vote at 06:24 when it became clear that the total number of votes in areas left to declare would not be enough to change the end result. The formal result did not follow until 08:16 when all councils had completed their tallying. It is possible, though not confirmed, that a similar, informal declaration may take place.