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The referendum result: the impact of our decision

04 August 2016

BIFM International Special Interest Group recently staged a webinar to discuss the impact of the UK's decision to leave the EU.

This event, along with the other two World FM Day events, was hosted and sponsored by Polycom. Polycom’s technology enabled attendees to join in person or remotely via telephone or video link.

David Massingham, political analyst discussed the reality of our decision post the referendum.

The result has left us as a split nation among many fault lines, regionally, politically and socially. The political fall-out is still being felt as David Cameron’s resignation was only the start and many political ambitions have been damaged.

The consequences of this for the country will be felt in the future. In the meantime the exit process can’t begin until Article 50 is invoked.

As no one has ever invoked Article 50, i.e. official notification that it is leaving the EU, this is unknown territory.

Two things are clear once it is set in motion the UK will no longer be part of the council and there could be a possible two year wait until the process is finalised.

The final terms have to be ratified by the 27 remaining members and the EU Parliament. There is the question of when and how Article 50 would be invoked and whether it would be subject of a Royal prerogative or a parliamentary vote.

The UK’s ability to negotiate is also in doubt based on the volume of work that this would require for a diminished civil service following the rounds of cuts in the public sector. The statute book would have to be reviewed and the legislation created as a result of EU membership considered and assessed as to whether it should be revoked or not.

This is another task that would sap already stretched resources. There is also the issue of whether the terms of the Brexit would need to be the subject of another referendum. The new Prime Minister has said very publically that “Brexit means Brexit!”.

Any negotiation would have to take in to consideration the reasons that people voted leave. The questions of immigration, trade, regulation, funding and sovereignty would all need to be reconciled.

There are three options for Brexit EEA (European Economic Area) minus (freedom of movement), EEA and hard Brexit which would require bilateral agreements and the World Trade Organisation.

David’s forecast is for the EEA option such as Norway has negotiated and this was the preferred option for Theresa May earlier this year.

The other member states position is not to enter in to any negotiations before Article 50 is signed.

They are very clear that freedom of movement is not negotiable if the UK still wants the other benefits of being in the EEA and there are to be no relaxation of financial services passporting rules.

The effect on Europe as well could be challenging with other countries facing pressure to suggest an exit and the rise of other domestic problems such as autonomy for regions in Spain and the rise of the far right in France.

The UK leaving the EU also creates a funding gap of about £10 billion equating to around 7-8% of the EU budget.

A hole that could be filled with the EEA solution as the UK would be contributing £10 billion once again. The short term economic consequences have been witnessed already with market falls especially in finance and in the property sector.

The level of risk is being equated to the slump of 2008. The reality is we are a small island. A longer term consequence is a disunited Kingdom. The rise in hate crime has been shocking and the divide is across generations and social attitudes.

A still bigger divide could be independence for Scotland where a second referendum would almost certainly result in a vote to leave.

For Northern Ireland a hard Brexit would bring huge consequences with border control and freedom of movement between the north and south restricted.

London is already suggesting that greater devolution would safeguard the city from some of the more damaging consequences of Brexit from an economic perspective.

It is possible, however, that we could look back in four or five years and consider that not much changed. The discussion that followed centred on the effect on recruitment in FM and the 45 years of UK regulations influenced by EU legislation.

TUPE is a good example in the world of FM world where workers’ rights have been upheld as a result of the UK’s membership of the EU.

The event closed with a debate, and questions from the floor.

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