Aiken PR

The Briefing

Britain and the EU: One year on from the Referendum

by Aiken PR

23/06/2017

On the eve of last year’s historic referendum decision, Charles Dunstone, entrepreneurial founder of Carphone Warehouse stated confidently: ‘In my experience there are calculated risks, there are clever risks, and there are unnecessary and dangerous risks. And from all I can conclude, Brexit sits firmly in the latter camp.’

Unnecessary… Dangerous… But democratic: In what has become a domino of unexpected political events, Britain will be leaving the European Union in March 2019 following the triggering of Article 50 on the 29th March this year. The recent UK General Election seems to have confirmed that the unexpected is quickly becoming the status quo for UK business: news that no investor or entrepreneur is likely to jump with joy about. The decrease in value of Sterling and the slowing of economic growth since June 2016 is not however based solely on that uncertainty, but often, reasoned examinations of how the British economy will fare following its exit from the European Union. The defeat in France, Holland and Austria of Eurosceptic candidates has seen the EU look almost reborn ahead of Brexit negotiations. The eurozone economy grew faster than Brexit Britain’s in the first quarter of this year and support for the European Union has risen across its member states since the referendum result last year.

Meanwhile in the UK, retail sales have dropped, wage growth has stagnated, inflation is at a four–year high and the pound has weakened further after Theresa May’s election gamble backfired and she failed to secure a majority in parliament. As a result, it is now extremely unlikely that Theresa May will be the leader of the country for much longer: adding further uncertainty and possibly even another General Election before the year is out. In this saga, the next major milestone will come when the German people go to the polls on the 24th September. If, as current polling suggests, Angela Merkel is re–elected, her stability will likely stand in stark contrast with whoever leads the UK going into next year and it will be another morale boost to a European project that many viewed as defunct just 12 months ago. May’s “fair and serious offer,” today to guarantee the rights of EU nationals residing in the UK, seems to suggest a softening of her ‘bloody difficult’ stance and may be a catalyst from which the negotiating stance of both sides will become more amenable to one another.

Angela Merkel described today’s announcement by Theresa May as a “good start to negotiations” but with expected gridlock over issues like the jurisdiction of the EU court of human rights, membership of the common–market and movement of people, the chances of sustained agreement between the two sides is highly unlikely and a storm may well be brewing on the political horizon.

How that storm makes landfall is still up for speculation but it is wise for those likely to be affected to batten down the hatches.