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Jun 27, 2016

Bloomberg View - June 27, 2016: Broken Britain's Uncertain Future

www.bloomberg.com



Mark Gilbert
 
The divisions revealed by Britain's vote to leave the European Union make for a domestic outlook that's just as uncertain as the nation's international future. Here are some of the known unknowns facing the U.K. in the wake of Thursday's referendum:

  • David Cameron's Friday resignation means his fractious Conservative party needs a leadership election. That will pit "Leave" supporters such as Boris Johnson and Secretary of State Michael Gove against "Remain" losers including Chancellor of the Exchequer George Osborne and Home Secretary Theresa May.
  • Scotland, which voted overwhelmingly to stay in the EU, will seek its own referendum on whether to split from the U.K.
  • In Ireland, Sinn Fein wants its own plebiscite on reuniting with Northern Ireland for the first time since the country was divided in 1921.
  • And back in Westminster, members of the opposition Labour Party are trying to ditch their leader, Jeremy Corbyn, accusing him of a lack of leadership during the EU campaign.
Conservative party elections are often violent affairs, and the forthcoming selection battle is likely to be particularly bloody between pro- and anti-Europeans. Johnson, who campaigned to leave the EU, is the 11/8 favorite, which gives him about a 42 percent chance of victory and means a $1 bet would win you a $1.38 profit:
Whoever wins is likely to have to preside over the break-up of the United Kingdom. The map of who voted for what in Thursday's referendum shows why Nicola Sturgeon, the First Minister of Scotland, says a second vote on independence is "on the table" less than two years since Scots rejected the chance to go it alone:
Source: Sheldon Reback/Bloomberg News
"Scotland faces the prospect of being taken out of the EU against our will," Sturgeon said on Friday. "I regard that as democratically unacceptable. There’s no doubt that yesterday’s result represents a significant and material change in the circumstances in which Scotland voted against independence."
The 55-45 margin by which separatists lost the September 2014 fight is narrow enough to suggest that asking the question a second time may well produce a different answer; the 62-38 Scottish vote to stay in the EU highlights why Europe might deliver victory to the secessionists next time.
The Thursday poll also suggests a worrying demographic split in Britain. The website Lord Ashcroft Polls suggests just 27 percent of 18 to 24 year-olds wanted to leave the EU, with 73 percent hoping to stay. But 60 percent of pensioners backed a departure. Media reports that Queen Elizabeth had asked dinner guests for three reasons to remain in Europe may have helped sway the grey vote:
In his Friday victory speech, Johnson claimed that "Britain will continue to be a great European power." He's deluding himself; as Czech Prime Minister Bohuslav Sobotka said, the U.K. is now "weaker and less important" to its European neighbors. So if former U.S. Secretary of State Henry Kissinger were to repeat his alleged question, "Who do I call if I want to speak to Europe?" the answer would definitely not be 10 Downing Street.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Mark Gilbert at magilbert@bloomberg.net
To contact the editor responsible for this story:
Susan Warren at susanwarren@bloomberg.net