The UK has woken up a little bleary eyed to find that her people have spoken and the majority of voters have chosen to leave the European Union (EU) – a victory for the Leave campaign. So, what now? After months of campaigning, it is vital that we all accept the result, look forward and focus on the UK’s future.
The EU Referendum campaign will have consequences
A campaign as intense as this was will have consequences. I have been in 11 UK cities in the last 3 weeks and have spoken with local campaigners on both sides about the mood on the ground. Without doubt there are issues which have been bubbling beneath the surface that the campaign has brought to the boil.
The campaign has exposed divisions across the UK. The pre-vote polls strongly suggested there are clear differences by age, social class and geography on key issues such as immigration, sovereignty and the economy. During the campaign we heard concerns over access to education, the NHS and housing as well as frustration over the nature and value of opportunities in the labour market.
What are the priorities for action?
Moving forward it is vital that the issues raised in the referendum campaign are addressed. A sustainable long-term solution will look to ensure the benefits from changes in the UK’s relationship with the EU and the rest of the world and will be directed to improving the situation in the whole of the UK. Clearly the UK needs to negotiate the terms of its separation from the EU and to start to engage with other trading partners to make clear that Britain is open for business. At the same time it is at least as important to consider the domestic political agenda. This two-pronged approach is essential to get the UK moving forward together as one nation.
Europe is one key area…
As far as relations with the EU go, the priorities should be to begin the process of defining the future terms of trade and the UK’s approach to the movement of labour. This is likely to require trade-offs at some point, although the strong concerns voters raised over immigration may tie the negotiators’ hands somewhat.
…but the referendum has shone a light on many domestic challenges.
It would be wrong to interpret the vote as solely a comment on the UK’s relationship with the EU. The country is divided and any future settlement must be designed with the aim of improving the economic and social circumstances of people across the whole country. The drive to devolve economic decision-making power has already started and this now needs to be bolstered. Key components of making this a success will be the development of a manufacturing strategy and a concerted approach to build up the UK’s digital skills capability. These efforts should be integrated to the UK’s trade negotiations to ensure we are working to maximise the new opportunities available to us.
The future has to be one of inclusive growth
There is a need to think about the economy more strategically as part of the process of preparing and then running negotiations with the EU and other trading partners. How might we do this? Is there an opportunity to create a special commission or a group that can really focus on future UK inclusive growth? Many businesses will be looking to the Government to set out a five year vision for the UK that can be marketed to the rest of the world, and many citizens want to be reassured their lives will be improved. A tri-partite initiative with a national remit which involves all groups and geographies seems like a new way of thinking. It may herald the start of a new era in UK economic policy-making to sit alongside the new era in external relationships we are embarking on.
For further EY analysis click here.