2016 looks likely to be the year in which voters get to decide whether the UK will stay in the European Union. If David Cameron secures a deal with other EU leaders next month, we can expect to know the referendum date shortly afterwards. Then the key players will settle their positions and decide their core arguments. In the run-up to this crucial moment, we need clarity as to what the options are and what will happen in the event of a vote to remain or to leave.
The implications of a vote to remain are easily predicted: the UK will stay in the EU, with whatever tweaks to our terms of membership David Cameron has negotiated. But what happens in the event of a vote to leave? That is much less obvious. This post sets out the processes and probes their implications.
The legal framework
We might start with the EU Referendum Act, which received royal assent just before Christmas. It sets out the referendum rules, so could be expected to define the effect of a vote either way. Alas, it does not: it makes no provision as to the referendum’s legal effect.
That is because, strictly speaking, it has no legal effect. It will be purely advisory and, in law, the government could simply ignore the result. In this it contrasts with the legislation for the electoral system referendum in 2011, which required the minister responsible to enact the result. But it is the same as the legislation underpinning the Scottish independence referendum of 2014 and, indeed, the referendum on membership of the Common Market in 1975.
Whatever the legal position, however, the political reality is that the government will have to respect the result. If the vote is to leave the EU, the Prime Minister will announce that the UK will indeed leave.
But that departure will not happen immediately: first comes a period when the UK can negotiate its future relationship with the EU. And here the process is regulated by law – specifically, by Article 50 of the EU’s Lisbon Treaty.
The details of Article 50 really matter
Article 50 sets out the procedure to be followed if a country wishes to leave the EU. Its terms are important, so the box below gives the full text. In summary, the withdrawal process starts with a statement from the Prime Minister to the European Council (the collection of EU heads of state and government). Then a negotiation begins, with the 27 continuing members on one side of the table and the UK on the other. For a deal to be done, both sides need to agree. On the EU side, that requires support from a qualified majority of the continuing members (specifically, the so-called ‘super qualified majority’: at least 72 per cent of the continuing members, representing at least 65 per cent of their population) and from the European Parliament. If no deal is done within two years, the UK’s membership automatically ceases, unless the 27 vote unanimously to extend the negotiation.
Article 50 of the Lisbon Treaty
- Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
- A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.
- The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.
- For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.
A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.
- If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.
This has implications for two important things: the balance of power in the negotiations; and the possibility of holding a second referendum.
The balance of power
Put simply, Article 50 gives the 27 continuing member states predominant power. That comes partly from the fact that, according to Paragraph 4 of Article 50, the withdrawing state no longer counts as a member of the European Council for the purpose of the negotiations. But mainly it comes from the guillotine imposed by the two-year deadline and the requirement for unanimity to extend that deadline. The negotiations will be long and contentious. An extension beyond two years might well be needed – but any one of the 27 could block that if it didn’t get its way on its own priorities.
We should not overstate the power imbalance here. Writing in Prospect magazine last month, Bronwen Maddox said, ‘Clause 4 says that after a country has decided to leave, the other EU members will decide the terms—and the country leaving cannot be in the room in those discussions. Repeat: we’d have no say at all on the terms on which we’d deal with the EU from then on, and no opportunity to reconsider.’ That isn’t right: Clause 4 says only that we wouldn’t be in the room when the EU decides its position in the negotiations; but of course we would be in the room when the EU is negotiating with us. Furthermore, the UK is a country with clout, and it could use that to extract some advantage.
But the imbalance is nevertheless real and great. Even one Eurosceptic blogger has commented that ‘Article 50 is not really a process designed to facilitate the exit of a nation state from the EU – it is an attempt to build a process that is so risky, politically and economically, that no country would dare invoke it’. Furthermore, Professor Steve Peers from the University of Essex, writing in a detailed post in 2014 that deserves to be read carefully, suggested that this imbalance may be greater even than it appears on the surface. It might be thought that the unanimity issue is not too serious: unanimity is not needed for a deal to be signed, so, while any of the 27 can stop an extension to the negotiation period, none alone can prevent the other members from cutting a deal within two years. As Peers points out, however, things are not necessarily so simple. While a deal can be struck by qualified majority under Article 50, some of the content that the UK would want for such a deal – including aspects of a free trade agreement – would need to be ratified by all member states.
Could there be a second referendum?
So if UK citizens vote to leave, it is unclear exactly what kind of future they are voting for. This raises the question of whether it might be more appropriate to hold a second referendum, following the negotiations, to see whether voters accept the deal. The Constitution Unit has long argued for a two-referendum approach to Scottish independence, and the same logic might be said to apply to EU membership as well. George Osborne recently reiterated the government’s position that there will be no second referendum. Nevertheless, Boris Johnson signalled interest in such a plan last summer, and the columnist Simon Jenkins has given it strong backing. The idea appears first to have attracted attention after it was suggested in a blog post by Dominic Cummings, leading light in the Vote Leave campaign.
But what kind of referendum are these people proposing, and is it actually possible under Article 50? Some seem to suggest that the second referendum could be on improved terms of EU membership. The Sunday Times story that communicated the London mayor’s thoughts said, ‘Johnson has told friends that a “no” vote is desirable because it would prompt Brussels to offer a much better deal, which the public could then support in a second referendum.’ The idea seems to be that we could retain EU membership, but on much more radically changed terms than are currently on offer.
But that is not possible. It would require a negotiation for revised membership terms, when what Article 50 provides for is a negotiation to cease membership. It might be suggested that it’s the politics that matter, not the rules – if EU leaders want to negotiate revised membership (and all do say they want the UK to stay in), they could do so. But the political reality in the UK after a vote to leave would require the Prime Minister to negotiate the terms of departure. He or she would have a mandate to do nothing else. As Steve Peers puts it, ‘those who claim to support invoking Article 50 to trigger renegotiation either have a hidden agenda or are quite naïve about what they are suggesting’.
What both Cummings and Jenkins appear to have in mind is, rather, a referendum on whether to accept the terms of exit. As Cummings unabashedly admits, he proposes this prospect in order to persuade waverers to vote ‘leave’ at the first ballot, safe in the belief that they could always change their minds later. Matthew Parris has endorsed just that thought: ‘The terms on which we leave could affect us deeply. So I’ll stick my neck out. If Britain votes to leave, there will have to be a second referendum. And we will have to have the opportunity to relent of our first decision.’ Notwithstanding official denials, James Kirkup said a few months ago that this reflects what some senior people in government are thinking.
So these authors are suggesting a referendum to choose between leaving on the negotiated terms or not leaving after all. The trouble with this is that Article 50 offers no mechanism to withdraw a notification of intent to leave. We could have a second referendum (the UK parliament can call a referendum on anything it likes), but a vote to reject the negotiated terms would leave us in legal limbo. The European Court of Justice might rule (if asked) that an ability to withdraw such a notification is implied by Article 50 – but it might equally well rule that it is not implied. Some might say again that political realities will take over: the 27 other member states all want us to stay, so, if we indicate a change of heart, they will allow our withdrawal declaration to be quietly forgotten. Well, perhaps. But that would again require unanimity – either to amend Article 50 (and we know how much effort is required to change an EU treaty) or, in effect, to extend permanently the two-year negotiation window. Hence, any member state could drive a hard bargain, potentially one detrimental to the UK.
Anyone who suggests that unsure voters can vote to ‘leave’ at the initial referendum safe in the knowledge that they can later change their minds is either playing with fire or manipulating voters disingenuously.
In fact, the only second referendum whose effect would be clear is one where the options are to leave on the terms that have been negotiated or to reject those terms and hope we can get something better before being forced, under the terms of Article 50, to leave without having negotiated any terms at all. That might strengthen the UK’s negotiating hand – but it would also be fraught with risks. The Greek government tried something similar last summer but ended up effectively accepting the original deal anyway, having recognized that other Eurozone countries would budge no further. And everyone agrees that leaving without negotiated terms would be crazy: for example, leaving with no free trade agreement in place would, under World Trade Organization rules, require imposition of tariffs on some UK–EU trade. In any case, such a referendum would be nothing like the one Cummings and others have floated, offering no comfort to waverers at all.
All in all then, Article 50 makes life very difficult for any country wishing to withdraw from EU membership. We might think this deliberate and take it as yet another symptom of perfidious Brussels. But we should remember that our own government and parliament signed up to it. We should recognise also that it is the reality that we will find ourselves in in the event of a vote for Brexit.
The views expressed in this explainer are those of the authors and not necessarily those of the UK in a Changing Europe initiative.