Read APCO's summary of key points of impact resulting from the UK's referendum to leave the European Union.

1. APCO Perspectives on Brexit
A view from London
www.apcoworldwide.com
POLITICAL OVERVIEW
• At 4.50 this morning the BBC declared the EU referendum
result for Leave with 52% of the electorate and more than
1.2 million additional voters choosing to exit the 40-year
relationship with the EU rather than remain, with voter
turnout at 72%.
• There was massive division amongst voters. The vote
brought polarisation of young and old, London and rest of
England, educated municipalities versus urban areas,
Scotland against Wales.
• It was anticipated that the Prime Minister would address
the media to reassure the country that he would liaise with
European partners and ensure stability. Instead he
resigned. He promised to do what he could to calm
financial markets and create political certainty over the
coming months. His intention is that a new leader is in
place before the Conservative Party Conference in
October.
• Boris Johnson and Michael Gove praised Cameron, though
they were late to speak and handed initial advantage to
Nigel Farage. Johnson stressed again that “EU is too
remote, too opaque and not accountable to people it is
supposed to serve”, before reaching out to younger voters
who may feel estranged from this vote.
• The Government will continue taking forward legislation
announced in the Queen’s Speech.
• There have been some calls for an early general election
given the new Prime Minister will not have been elected
with a mandate or fought for a manifesto that is now to a
‘certain extent’ out of date. This is however unlikely as the
Conservatives would most likely not win another overall
majority following last night’s vote.
• There has been no comment from the Chancellor thus far,
yet his fate is tied to that of the Prime Minister. The
likelihood of him succeeding David Cameron has now all
but vanished.
• Leader of the House of Commons Chris Grayling would
not confirm this morning on the BBC when the
government would invoke Article 50 (the two-year process
required for the UK to formally invoke an EU treaty article
to begin exit negotiations ) saying that informal
preparations needed to be concluded before they would
‘pull the trigger’. He left this open-ended to suggest this
could happen any time before the next General Election.
• Until such time as Article 50 is invoked, the 2.5 million Brits
that live in the EU will not need to fear ejection from their
adopted EU country of choice. However, tellingly the
number of Google searches for Irish passport applications
this last week has gone through the roof.
• EU President Donald Tusk (Poland) tweeted this morning
that the result was a ‘serious, even dramatic moment.’ He
said ‘on behalf of all 27 leaders we are determined to keep
our unity as 27.’ (The UK therefore has already been
factored out of the original 28 figure.)
• Donald Trump, currently in Scotland, commented this
morning that he had predicted the outcome of the vote
and that the UK ‘had taken back its country.’ There has
been no official response from President Obama, the
White House or Hilary Clinton thus far. Political betting
odds on Hilary Clinton becoming the next President have
sharply fallen.
• Angela Merkel has said she ‘greatly regrets’ the UK’s
decision.
ECONOMICS
• Mark Carney, Governor of the Bank of England, came out
shortly after Cameron’s resignation to say that he will use
all the means at his disposal to maintain market stability,
mirroring the Mario Draghi approach. Central Banks
around the world are having to intervene to quell volatility
in the market place. Carney gave an assured performance
suggesting the situation was under control and the pound
rose on that, giving credence to those who say that ‘not
much will change’ in the mid-term.
• UK growth will continue to slow, perhaps only a
percentage point over the next year, but it could easily be
more if Brexit has an impact on the global economy. The
euro area will undoubtedly be affected, but less so. The
dramatic drop in sterling will make imports more
expensive, especially oil, which is priced in dollars. Falling
stock markets will also reduce pension savings.
• In terms of the UK’s trade with the Eurozone, there will be
no immediate impact on trading conditions and foreign
investment sentiment. Yet, the Leave campaign advocated
exiting the European Single Market, which thousands of
businesses rely upon. The EU is also unlikely to give the UK
preferential treatment in the future and we have already
seen multinationals, especially banks, contact their staff
flagging that a change in strategy is required, including
moving jobs out of Britain. It is as yet unclear if they will
make good on these ‘promises’.
• Major projects such as HS2, Hinckley Point and Heathrow
must be in serious doubt, which taken collectively could
reduce the attractiveness of the UK for overseas
investment. As will the delayed triggering of Article 50 until
at least October, which increases uncertainty.
CONSERVATIVE PARTY
• The Conservative party is about to go on a journey of
discovery and possible self-destruction. Only the
Conservative party could make itself unelectable over the
issue of Europe at a time when Labour are inherently weak
and rudderless at the top.
• Michael Gove has said that he doesn’t have the stomach
for leadership while Boris Johnson has unashamedly
coveted the top job. The runners and riders for leadership
of the party and position of Prime Minster are:
o Boris Johnson (VoteLeave front man and odds on
favourite)
o Theresa May (odds have been slashed on the Home
Secretary given her lack of visibility during the campaign
and her known eurosceptic views, despite pledging for

2. APCO Perspectives on Brexit
A view from London
www.apcoworldwide.com
Remain)
o George Osborne (Unlikely to declare given last night’s
result but former front runner)
o Stephen Crabb
o Liam Fox (right wing of the party, could be a kingmaker)
o Andrea Leadsom (Energy Minister and star of the Leave
movement. Business background)
o Ruth Davidson, star of the last debate before the
election
LABOUR PARTY
• A lot of overnight commentary has focused on the weak
Labour vote in key heartlands. With attention so closely
focused on the financial repercussions of 'Brexit' and what
David Cameron once called the 'Tory psychodrama', it
would be easy to forget that this was a chastening night
for Her Majesty's Opposition too.
• A substantial majority of the Parliamentary Labour Party is
unashamedly pro-Europe and has been for two decades.
But the core of the traditional blue-collar Labour vote, in
the cities of the North, the Midlands and across Wales has
not so much abandoned the party's stance as eviscerated
it.
• As it stands, the party is at odds with its electorate - and
stuck between the two is Jeremy Corbyn, the recently
converted Eurosceptic whose underwhelming efforts for
the Remain campaign have infuriated Labour MPs.
• Rumours of an attempt to oust Corbyn have intensified
since the Prime Minister's Resignation. If sufficient
numbers of Labour MPs sign the letter currently circulating,
which would demand his resignation, then Corbyn may call
a leadership contest. But his critics would do well to
remember that the party base is still dominated by the
left-wing activists who put him in power.
• Should the Labour backbenches succeed in ousting
Jeremy Corbyn (highly unlikely) then potential successor
candidates are:
o Jeremy Corbyn (would most likely stand again, and
given grassroots support would win)
o Keir Starmer
o Chuka Umunna
o Tristram Hunt
o Dan Jarvis
All candidates bar Corbyn would be seen as New Labour
progressives.
FUTURE OF THE UK
David Cameron concluded his press statement outside
Number 10 Downing Street this morning by saying that
negotiations must involve the full engagement of the Scottish,
Welsh and Northern Irish governments.
Scotland
• Scotland was the only home nation to vote overwhelmingly
in favour of Remain and as a result SNP and First Minister
Nicola Sturgeon came out quickly to say that Scotland’s
future belongs within the European Union and that she will
prepare the required legislation to set up a second
independence referendum.
• When an independence vote would be called may not be
in Sturgeon’s control, most likely at the end of the 2-year
Article 50 process. The question would be whether the
other 27 EU member states (including Spain that has
concerns about the secessionist Catalan movement) would
unanimously agree to adopt Scotland into the EU.
Wales
• Welsh First Minister Carwyn Jones addressed the media
this morning and stressed that Wales must not lose a
penny as a result of a Brexit decision. This was a promise
that was made prior to the EU referendum vote. As a
regional block vote Wales voted overwhelmingly to leave
the EU. As a result, the likelihood of a break-up of the
United Kingdom as a result of a Welsh decision to leave is
very unlikely. The resurgence of UKIP in the recent Welsh
Assembly elections would also testify to this.
Northern Ireland
• ‘Brexit’ poses a potentially serious problem for Northern
Ireland, which like Scotland, voted to Remain in the
European Union. The border between Northern Ireland
and the Republic of Ireland will now be both an external
border of the European Union and the only external land
border of the UK itself.
• It is difficult to believe this will have no negative or
constricting implications for the passage of goods and
people between Northern Ireland and the Republic of
Ireland. The prospect of border controls for trade, tourism,
cross border workers and business is now very real. The
Good Friday Agreement, which has formed the basis of
lasting peace and political stability in Northern Ireland, was
predicated on both the Republic of Ireland and the UK
being members of the EU. Brexit throws this agreement
and the political devolution settlement into doubt.
• Finally, the Deputy First Minister of Northern Ireland, Sinn
Féin's Martin McGuinness has already called this morning
for a referendum on Irish re-unification given the
pro-Remain vote in Northern Ireland and the already
existing strong pro-EU sentiment in the Republic of Ireland.
To contact APCO Worldwide London:
Managing Director: James Acheson-Gray
jagray@apcoworldwide.com 00447725206970
Director, Public Affairs: Leon Cook
lcook@apcoworldwide.com 00447979355784
Director, Communications: Jolyon Kimble
jkimble@apcoworldwide.com 00447979355743