On 23 June 2016, the British public voted to leave the European Union. The ABI issued a statement and published advice for consumers reassuring them that there is no need to take any immediate action.
What happens next
Below, we give a snapshot of the next steps in the process of the UK’s exit from the EU.
Article 50: the beginning of the process
- The Treaty base for EU withdrawal is Article 50 of the Treaty on European Union (TEU). Article 50 has never been exercised but it is the only legal way to leave the EU. There is no precedent for leaving since the Lisbon Treaty (2009) so there is no clear framework for how it will work.
- Article 50 can be initiated by an Act of Parliament or by Royal Prerogative, namely HM Government simply making the decision to withdraw by giving notification.
- The timing of the notification is itself a political decision. David Cameron has announced that a new Prime Minister will be in place in time for the Conservative Party Conference in October – it will be for the new PM to decide how to approach the negotiations.
- Once the decision has been made, the (new) Prime Minister will have to formally notify the European Council of the UK’s intention to withdraw.
- The notification triggers a default 2 year period before the UK officially leaves – this can be shortened or lengthened should all EU 27 + UK (unanimously) agree.
- A European Council is scheduled for 28-29 June – where the outcome of the Referendum will be discussed.
- If there is no alternative agreement on the EU-UK relationship reached after (default) two years, then the World Trade Organisation rules would be the default 'replacement'.
Negotiation and withdrawal
- The UK would still be a Member State during the withdrawal negotiations and existing EU law would continue to apply in the UK, bound by the principle of “sincere cooperation”.
- The UK would no longer be a member of the EEA. The UK would have to seek to re-join EFTA and then apply to join the EEA. It’s possible that this could be tackled in the course of withdrawal negotiations.
- The UK Government would have to decide whether to retain EU-derived UK laws, amend or repeal them. There are UK primary and secondary laws which implement EU law (Directives), and EU laws that directly apply (Regulations). Careful consideration is needed about what the UK wants to keep, change, repeal or (for Regulations) introduce into UK law.
- A formal withdrawal agreement will be negotiated between the UK and EU.
Contact the ABI EU Exit Team
The ABI has established a team to work on this issue. ABI members who have further questions or would like a more detailed analysis on what happens next can email: email@example.com.