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Hanover - Uncertain Times Require Uncommon Sense

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As the day of the EU referendum approaches, the debate on potential consequences of a victory by the Leave camp for Britain and its business community intensifies. The debate however seems to focus mainly on the mid- to long-term effects of a British withdrawal from the EU. The more immediate impact of a vote in favour of Brexit on the role and influence of the British in the EU legislative process is largely ignored, and wrongly so.

The heads of government of the other Member States have already indicated their determination to play hardball should the UK decide to leave. It can therefore be safely assumed that the British government’s voice will hardly be taken into consideration on any of the pending legislative files of relevance.

But what about the 73 British Members of the European Parliament (MEPs)? Not a few parliamentarians from other EU Member States would like to see their British colleagues removed from the institution with immediate effect. There is of course no precedence on how to deal with such a situation, but a more likely scenario is that British MEPs will stay until the entry into force of a withdrawal agreement, likely to be 1st July 2018.

British MEPs chairing parliamentary committees or being spokespersons or whips for their political groups in key parliamentary committees will almost certainly be forced to give up these positions of influence.

Will they still have any meaningful impact on the outcomes of the legislative process? Probably not. British MEPs will of course still be able to vote for as long as they have a seat in the European Parliament. However, it is highly likely that they will be side-lined by their peers when it comes to working and negotiating on the substance of legislative proposals: British MEPs chairing parliamentary committees or being spokespersons or whips for their political groups in key parliamentary committees will almost certainly be forced to give up these positions of influence. Those who have been formally mandated with steering important pieces of legislation through the Parliament will probably be taken off the files in the weeks following the referendum.

The situation might be different for Tory MEPs who are the leading national delegation within the political group of the European Conservatives and Reformists (ECR). However, their leadership will also not be free from challenges as the calls for the resignation of Tory leader Syed Kamall from the chairmanship of the ECR Group after he had come out in favour of a Brexit have demonstrated. It would indeed be a surprise if Tory MEP Vicky Ford would be able to maintain her position as chairwoman of the Internal Market & Consumers Committee, one of the most important and influential parliamentary committees.

But why should the British business community care? After all Cameron announced just this past weekend that the UK would also leave the Single Market in case of a Brexit.

It should care, because no matter what the post-Brexit model for the relationship between the UK and the EU will be, rules made in Brussels will need to be followed to British businesses if they want to continue to sell their products and services in the EU, with 44% of exports by far the UK’s biggest trading partner.

Being basically deprived overnight of any lever of influence on files which will have a significant impact on the future of the business environment in the EU and beyond, such as the various legislative proposals under the Digital Single Market initiative for example, should be a daunting thought for any business with a significant stake in the EU market.

If the Leave camp wins, do not count on having time to adapt to the new playing field. With a government isolated by its European peers and a Parliament full of British lame ducks, the cut off will come quicker than expected. UK businesses, therefore, better find alternative channels to make their voice heard in Europe’s regulatory capital quickly.