Brexit: What happens now?
28 June 2016
In June it became clear that a majority of British voters had chosen to cast their vote in support the UK leaving the EU. Since before the referendum, the Swedish Chamber of Commerce for the UK supported the Remain campaign. As the British voters chose to back Brexit, however, the Chamber has pledged to continue promoting Anglo-Swedish business to the same high standard as we have done for the last 110 years.
Since the results were in, we have been getting many questions by Members and Non-Members about what a potential Brexit might mean to them. Despite the general uncertainty about short term consequences, we have attempted to answer some of these frequently asked questions here:
What does a Brexit mean?
In practice, all that’s going to happen right now is that we will be entering a long stretch of uncertainty. The first thing that has to happen is for the Commons to vote on activating Article 50 of the Lisbon treaty. Article 50 is a very simple 5 point plan that will initiate the withdrawal of the UK from the European Union. Once Article 50 has been activated, the negotiations of the divorce settlement begin. These negotiations are supposed to be finished within 2 years, although some experts think it will take closer to a decade. While this is happening, the UK is cut out of EU decision-making and there will be no way back unless by unanimous consent from all other member states. The effect this will have on Swedish trade and Anglo-Swedish business relations remains to be seen. It will partly depend on what kind of trade agreement the UK will negotiate with the EU. However, due to the magnitude of British trade with Sweden, there is every reason to believe that a favourable agreement will be met.
What effects will a Brexit have on the UK?
Most economists agree that a Brexit will have negative effects on the UK, on the EU and on Sweden. However, as no country has ever left the EU before, it is very hard to tell what these effects will be. As the UK hitherto has been the largest receiver of foreign direct investments, it is very probable that an exit from the union will have significant consequences. It is also unlikely that London will retain its identity as the main financial centre of Europe.
What effects will a Brexit have on Swedish companies operating in the UK?
According to Business Sweden, there will be few changes in the short term but in the long term there may be new trade agreements needing to be taken into consideration. However, there are indications that there will be good conditions for trade with the UK even after a Brexit. Business Sweden has initiated an in depth analysis to identify the consequences - but also the potential opportunities - that a Brexit may entail for Swedish companies.
What potential risks are there at this stage?
All uncertainty creates instability, which is bad news for investment and trade. It is therefore important that it becomes clear how and when the exit will happen and that it then proceeds in a controlled way. According to Business Sweden, the instability could otherwise spread to other member states, which could lead to further instability.
Will I be able to stay in the UK if I am an EU national already resident here?
Today, about 3m EU nationals are in the UK, making up some 6.6 per cent of the workforce. There is great concern among many about what the invoking of Article 50 will mean for their right to stay in the country. Again, it is very unlikely that anything will happen in the short term, but many experts are saying that as immigration was such a large part of the campaign, the consequence will be that people will need new documentary evidence of their right to remain.
There is already an Australian-style points system for would-be immigrants from outside the EEA and there is no reason to doubt that this could not be applied to new applicants or even current residents. The Guardian reports that the rights of EU citizens living in the UK are not guaranteed and would be part of the negotiation with Europe in the event of a Brexit. Those who have been living in the country for more than 5 years can apply for a permanent residence permit. However, we see no reason for any Swedish national currently employed and resident in the UK to be worried at this stage.
The Chamber is lucky enough to be able to tap into great resources from our very diverse network to help answering any questions about what a potential Brexit could entail for companies and professionals. If you need to get into contact with us regarding this, please email us on firstname.lastname@example.org or call the Secretariat on +44 (0)20 72248001.
The Swedish embassy will also be updating its webpage as soon as any information becomes available. In case of worry on a more personal level, many contact the Swedish Church to get a chance to talk. For any direct questions about impact on trade relations between the UK and Sweden, please contact Business Sweden.
Photo Credit: Than Tibbets/Flickr