The country has just taken part in a giant democratic exercise – possibly the biggest in our history, certainly the most important decision that we have taken as a nation in recent years. Over 33 million people voted – from England, Scotland, Wales, Northern Ireland and Gibraltar.
The outcome as you know, is that the voters have decided that the United Kingdom will leave the European Union. The Prime Minister is clear that this is the will of the British people, and that this is an instruction that has to be delivered. It is not an advisory referendum, this is a decision.
We therefore now have to prepare for a negotiation with the European Union. This of course will take place between the UK government in London and the EU, but it will need to involve the full engagement of the Scottish, Welsh and Northern Ireland governments to ensure that the interests of all parts of our United Kingdom are protected and advanced.
As you also know, the Prime Minister David Cameron announced on Friday morning that he will step down. He made very clear his support for the UK remaining in the European Union, and he felt that he could not continue as Prime Minister in the new situation. The negotiation with the European Union will start under a new Prime Minister. That new Prime Minister will decide when to apply Article 50 – that’s the measure that starts the formal and legal process of leaving the European Union. At present, no decision has been made about when to trigger Article 50.
So there is no precise timetable. The current Prime Minister will attend the European Council this week to discuss with European partners the decision that the British people have just taken.
I’d like to say a few words now about what has changed, and what has not changed.
First of all the economy; we have a fundamentally sound economy. It is inevitable that our economy will have to adjust to the new situation. There will be a discussion with the European Union about how our economy works with the Single Market in the future. Obviously I can’t predict at present where that negotiation will come out.
But the facts are that we have the 5th largest economy in the world, one of the most open in the world, one of the biggest outward and inward investors in the world. We intend to stay that way.
We come at this from a position where we have done a great deal of work, the government has done a lot of work over the last six years following the economic crisis after 2008, to rebuild the economy into a position of strength for the future.
Growth has been robust during that time. Employment is higher now than it has ever been.
The capital requirements for banks are ten times what they were at the beginning of the crisis. And the budget deficit has been brought down from 11% of national income at the height of the crisis, and was forecast to be below 3% this year.
Obviously we are facing a period of political and economic turbulence. The Treasury, the Bank of England, and the Financial Conduct Authority have spent the last few months putting in place robust contingency plans for the immediate financial aftermath in the event of this result.
The Bank of England has announced that it will provide, if necessary, £250 billion worth of funds, through its normal facilities, to continue to support banks and the smooth functioning of markets.
UK’s global position
Some things have not changed politically. First, and most obvious, the UK is still a member of the P5 on the UN Security Council. It is still a member of the G7, it is still a leading member of NATO, with some of the most capable armed forces and intelligence services in the world. We remain a member of the World Trade Organisation, of the Commonwealth and of a large number of other international organisations. We are one of very few countries in the world that spends 2% of GDP on defence, and 0.7% GDP on development aid, so meeting the NATO benchmark on defence and UN benchmark for aid.
There is no immediate change to our relationship with the European Union or our EU partners. The UK remains a member of the EU, with all rights and obligations, until we leave. There will be a negotiation about the terms of our future relationship with the European Union. Wherever that negotiation comes out, the countries of the EU will continue to be among our most important international partners. We have enormous economic interests, security interests, people to people links; and our shared democratic values have not changed. We will continue to work with the European Union and with the Member States whatever the outcome of the negotiation to leave the EU.
What does it mean for Russia?
Finally a few words on what this means for Russia.
First of all, the UK is still open for business. We need and Russia needs strong, stable economic partners. The UK is a major investment and trading partner for Russia. That will not change.
Second, we strongly believe in democratic choices for the people of Europe – and we respect the decisions made by them. The UK referendum was a decision by the people of Britain on a matter of fundamental importance. All sides of the debate had the opportunity to put their views forward. As the Prime Minister made clear, that is an uncomfortable decision and one that he and many members of his government disagree with. But what happened here was a democratic exercise – as the Prime Minister said, an instruction that must be delivered now.
Finally, we hold peace and security in Europe as our top priority. In our view, Russia’s actions in Ukraine represent a major challenge to the security of our continent. The EU and others reacted in a measured and proportionate way, which includes sanctions. All 28 members of the EU support those sanctions. The UK referendum does not change the fact that we believe that Russia’s actions in Ukraine are deeply destabilising for everyone’s security. But we will continue to work with Russia on matters of mutual interest, and to discuss with Russia how to ensure security for our continent.