Brexit could cause a decade of uncertainty: report

The process of leaving the EU could lead to “up to a decade or more of uncertainty” for the UK, according to a Cabinet Office report.

The document assesses the potential impact of the process for leaving the European Union. It argues that the negotiations involved could take over 10 years, with significant impact on the UK.

“It is probable that it would take an extended period to negotiate first our exit from the EU, secondly our future arrangements with the EU, and thirdly our trade deals with countries outside of the EU, on any terms that would be acceptable to the UK. In short, a vote to leave the EU would be the start, not the end, of a process. It could lead to up to a decade or more of uncertainty,” the report’s authors conclude.

Why the uncertainty?

The rules for a potential exit are set out in Article 50 of the Treaty on European Union. The report highlights that Article 50 is untested – no country has ever left the Union on this basis.

The negotiations would be highly complex, with all 27 remaining member states involved, the European Commission and the European Parliament. The report’s authors argue that this would result in a period of uncertainty, with likely financial, economic and employment impacts.

Any rights and obligations – for example access to the Single Market and joint action on sanctions – would also have to be renegotiated.

Article 50 specifies a two-year period for these renegotiations. If no agreement is in place after this time, and if any of the 27 remaining members vetoed an extension, the UK would leave with no replacement in place, say the report’s authors.

What are the possible impacts?

Any withdrawal from the Union would require renegotiation on a wide range of deals, with a range of difficult issues both around this negotiation and the UK’s future relationship with the EU, argues the report.

The rights and status of some 2 million UK citizens living, working or travelling within the EU would be unclear, as well as broader freedom of movement implications for British citizens. The report believes this would have particular consequences for Northern Ireland, with ability for people and goods to cross the border to Ireland potentially significantly impacted.

The UK economy could also be hit. A potential decade of uncertainty would influence “financial markets, investment and the value of the pound”.

The report goes on to argue that a “considerably larger proportion of the UK economy is dependent on the EU than vice versa”. Eurostat GDP data cited by the authors shows 12.6% of UK GDP is linked to exports to the EU. In contrast, just 3.1% of GDP among the other member states is linked to exports to the UK.

Issues of security and the global fight against terrorism and crime are also discussed. The authors believe that European-wide cooperation on these issues would be “curtailed”.

However, speaking to BBC Radio 4’s Today programme, Chris Grayling, the leader of the UK House of Commons, disputed the report’s findings. He argued that it would not take 10 years to renegotiate trade deals, because, “we [the UK] have a £50bn-plus a year trade deficit with the European Union. We buy far more from them than they buy from us.” This would result in a “relatively quick” renegotiation process.

He believes “people will not be impressed by this relentless campaign of fear”.

This sentiment was echoed by Iain Duncan Smith, the Work and Pensions Secretary: “The ‘in’ campaign’s whole strategy seems to be about basically saying we’re too small, we’re too little,” he told the BBC’s Andrew Marr Show.

The impact of the report on the British people remains to be seen.

This YouGov map, created using data gathered before the release of the Cabinet Office document, highlights the differences in opinion across the country.

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