UK quits EU in historical ‘Leave’ vote

Britain has voted to leave the European Union in a historic referendum that saw national independence prevail over European unity.  

More than 51% of voters in the United Kingdom chose to end the country’s 43-year membership with the EU, compared with 48% who voted 'Remain' to retain it.

The 4% majority support for Brexit is a defeat for David Cameron, who has emotionally resigned as prime minister having failed to convince the UK to stay in the EU.

UKIP leader Nigel Farrage was among those who called for Mr Cameron to step aside, which he promised to do this morning, fighting back tears in a statement outside No 10. He will depart in October.

Pro-Leave Tory MP Liam Fox acknowledged it would have been “uncomfortable” for Mr Cameron to stay in the event of a Brexit, but said it would have offered “political continuity,”

Other Tory Brexiters, such as Michael Gove and Boris Johnson also wanted their leader not to quit, despite the vote to leave triggering the biggest fall in the pound since 1985.

Yet the PM’s Remain campaign ran into difficulty as soon as the first local authorities began declaring on Friday night, with narrower than projected wins or outright losses.

Newcastle, regarded as a pro-European city, only just lived up to its reputation; Durham confounded expectations and voted Leave, as did Birmingham, Sheffield and Southampton.

London voted ‘Remain,’ in line with Northern Ireland and Scotland, but swathes of England and much of the North voted in large numbers for a Brexit.

Across the country as a whole, turnout was high – over 70%, equating to more than 30million people voting, representing the highest turnout since the 1992 general election.       

But 2008 is on the lips of commentators too: the last time that global markets experienced the type of financial turmoil that some now predict, as the UK faces at least two years of negotiations.

“The weeks and months ahead are going to be a nervy time for business leaders,” Simon Walker, director-general of the Institute of Directors, said this morning.

“They need to know that the government is focussed on maintaining stability while a new relationship with the EU is established.”

Contractors have been told that such nervousness may benefit them, as hirers will favour temporary hires who can be taken on more quickly and let go more easily than permies.

Yet Walker believes that the onus is now on politicians to negotiate a deal with European leaders which preserves the ability of UK firms to trade easily with the EU member states.

“Even once we have left, the EU will continue to be our biggest trading partner,” he said.

“One thing the government must do immediately is to guarantee the right to remain of EU citizens currently in the UK. [Firms] don’t want to have to worry about losing valued staff.”  

Companies with only one member of staff and other micro businesses might be expected to be more upbeat, for not having to worry about losing members of their team.

But whereas a pre-referendum poll by the IoD shows that 50% of members (typically employers) are positive about a future without EU membership, one-man bands aren’t so sure.

In fact, a pre-vote poll of such tiny traders shows that a majority think Brexit will hurt their businesses, and a further third said it would have no impact; rather than a positive impact.

“Many web-based small businesses who are increasingly selling products and services worldwide…think a Brexit will create an uncertain future,” said FreeAgent, which ran the poll.

“For tech companies, in particular, the EU also opens up the opportunity to hire world-class developers from Europe who can work alongside the best talent from the UK”.

Speaking this morning, EU Council President Donald Tusk offered some reassurance, saying that the UK’s two-year withdrawal period from the EU would not see it lose its EU rights.

While Mr Tusk’s statement also implies the UK will have to keep its responsibilities during the period, it also means freedom of movement will be unrestricted until the UK’s divorce completes.

The reverse applies too, so until a Brexit is achieved EU nationals will continue to be able to work in the UK without visas, just as Brits can keep working in EU countries without visas.

However, on the eve of today’s Leave decision, staffing body the REC warned that the prospects for all job-seekers would deteriorate if the UK reneges on its EU membership.

The body said: “A vote to leave is likely to see employers abandoning projects, shelving new expenditure and implementing hiring freezes during a prolonged period of uncertainty.”

Contractors will therefore be keen to see the “business transformation projects” they were told a Brexit might bring, on top of opportunities in “untapped” locations beyond Europe.

Anthony Sherick, managing director of TechnoJobs.co.uk, a job site for IT contractors, said that there may indeed be new opportunities. "There will potentially be public and private sector demand for tech expertise capable of getting IT systems up, running and reflective of an independent UK.

"Overall, leaving the EU is a significant outcome for contractors longer term. It may have implications in terms of EU legislation such as the Agency Working Regulations and also the ability of the UK to allow in more 'skilled' migrants from outside the EU.”

In a pre-referendum note to its subscribers however, TechMarketView, the IT market analyst, cautioned:

“Larger [IT] players…are universally in favour of Remain. Indeed many, Fujitsu is but one example, have made it very clear that they would review their investment in the UK in the case of Brexit.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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