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Negative Consequences of Brexit on the United Kingdom

Brexit

Ragheb Malli What is Brexit? Brexit is the nickname for “British exit” from the European Union. The U.K. left the EU on the 31st of January, 2020. The whole procedure began on the 23rd of June, 2016 when the result of an election in the United Kingdom saw the majority of the residents vote to leave the EU. The residents decided that the economic, financial and political benefits of belonging to the EU no longer outweighed the costs of free movement of immigration.

The vote was 17.4 million in favor of leaving versus 15.1 million who voted to remain.On the 29th of March, 2017, former U.K. Prime Minister Theresa May submitted the Article 50 withdrawal notification to the EU. Article 50 is a short 250 word outline, devised in 5 paragraphs that seems to have created a war between the U.K. and the EU. Article 50 says: “Any member state may decide to withdraw from the union in accordance with its own constitutional requirements.”It specifies that a leaver should notify the European council of its intention, negotiate a deal on its withdrawal and establish legal grounds for a future relationship with the EU.

On the European side, the agreement needs a qualified majority of member states and consent of the European parliament.The only real measurable detail in the article is a facility that gives negotiators two years from the date of article 50 notification to conclude new arrangements. Failure to do so results in the exiting state falling out of the EU with no new provisions in place, unless every one of the remaining EU states agrees to extend the negotiations.

On 24th of July, 2019, Boris Johnson replaced Theresa May as the U.K.’s Prime Minister. Johnson’s Conservative party attained a majority during a royally mandated general election on the 12th of December, 2019.As a result, Brexit will conform to his Withdrawal Agreement. On the 23rd of January, 2020, the Agreement Act received Royal Assent. The Royal Assent is when a bill becomes an Act of Parliament. Once a bill has completed all the parliamentary stages in both Houses (House of Commons and the House of Lords), it is ready to receive Royal Assent.

This is when the Queen formally agrees to make the bill into an Act of Parliament (law).This is the law that will implement the withdrawal agreement negotiated by the UK and the EU.Johnson’s agreement is very similar to the one negotiated by Theresa May. One main difference is that the U.K. would not be in a customs union with the EU. That includes U.K. member Northern Ireland. But it allows Northern Ireland to adopt EU customs rules in keeping with the Republic of Ireland, an EU member – which basically means that there will be no VAT between the two Irish countries.

That means there will be a customs and regulatory border between Great Britain and Northern Ireland in the Irish Sea – which also includes VAT.The EU and U.K. will negotiate a trade agreement that will probably impose tariffs on each other’s imports, but this won’t apply to goods already purchased or in process.As for the 3 million European nationals already living in the U.K., they will continue to live and work in the country without work visas and the 1.3 million U.K. citizens will continue to do the same in the EU. For the future, the U.K. has proposed an immigration system based on workers’ skills.The U.K. must also pay a ‘divorce bill’ of 33 billion pounds to fulfill any remaining financial commitments.

The Negative Consequences of Brexit on the United KingdomOf course, leaving the European Union has many benefits for the U.K, but do the benefits outweigh the disadvantages? There are 3 main disadvantages that the U.K. will have to face due to Brexit: growth, trade and jobs.The U.K. has already suffered from Brexit. The economy has slowed, and many businesses have moved their headquarters to the EU.

There would also be consequences specific to Ireland, London, and Scotland.Brexit’s biggest disadvantage is its damage to the U.K.’s economic growth. Most of this has been due to the uncertainty surrounding the final outcome, which has caused a slowdown in the U.K.’s economic growth from 2.4% (2015) to 1.5% (2018). Also, the British pound fell from £1.48 on the day of the referendum to £1.36 the next day.

That helps exports but increases the prices of imports. The pound may strengthen once a deal is approved, depending on the trade terms, as will the economic growth in the future.Brexit would get rid of Britain’s tariff-free trade status with the other EU members. Tariffs would raise the cost of exports which would hurt U.K. exporters as their goods become more expensive in Europe. Some of that pain would be balanced by a weaker pound.Tariffs would also increase the prices of imports into the U.K. More than 1/3 of its imports comes from the EU. Higher import prices would create inflation and lower the standard of living for U.K. residents.

The U.K. is already vulnerable because heat waves and droughts caused by global warming have reduced local food production.The U.K. would lose the advantages of the EU’s state-of-the-art technologies. The EU grants these to its members in environmental protection, research and development, and energy.Also, U.K. companies could lose the ability to bid on public contracts in any EU country. These are open to bidders from any member country. The most significant loss to London is in services, especially banking. Practitioners would lose the ability to operate in all member countries.

It could raise the cost of airfares, the internet, and even phone services.As for jobs, Brexit would hurt Britain’s younger workers. Germany is projected to have a labor shortage of 3 million skilled workers by 2030.Those jobs will no longer be as readily available to the U.K.’s workers after Brexit.

Employers are now having a harder time finding applicants. One reason is that the number of EU-born workers fell by 95% in 2017. This has hit the low-skilled and medium-skilled occupations the most.These are the main negative consequences that the U.K. will have to go through as a result of Brexit. However, we must also remember that the United Kingdom, is exactly that – a united kingdom made up of different sectors, in this case: England, Ireland and Scotland.

Brexit will affect the relations between these as Scotland did not want to leave the EU, they voted against Brexit, since the Scottish government believes that staying in the EU is the best for Scotland and the U.K. It has been pushing the U.K. government to allow for a second referendum. This strains the Scottish and English relations as to leave the U.K., Scotland would have to call a referendum on independence. It could then apply for EU membership on its own – which is what a lot of Scottish citizens, as well as its leaders want.Ireland on the other hand is a little more complex as it is split: Northern Ireland and the Republic of Ireland. Northern Ireland would remain with the United Kingdom.

The Republic of Ireland, with which it shares a border, would stay a part of the EU. Johnson’s plan avoided a customs border between the two Irish countries because a customs border could have reignited The Troubles (a 30-year conflict in Northern Ireland between mainly Catholic Irish nationalists and pro-British Protestants. In 1998, it ended with the promise of no border between Northern Ireland and Ireland).

A customs border would have forced 9,500 commuters to go through customs on their way to and from work and school. Brexit would also affect the 2,100 workers who commute to Great Britain.It is fair to say, that whilst the U.K. predict more favorable outcomes in their future, in regards to their currency and economical/ financial growth, it is safe to say that even the U.K themselves did not expect such hard consequences and such a hard exit from the EU.In the end, it is clear that Brexit imposed three hard choices on the U.K.:1. Leave with no deal, known as “no-deal Brexit.” Without a trade agreement, ports would be blocked and airlines grounded. In no time, imported food and drugs would run short.2. Vote again on Brexit. Many argue that voters did not understand the economic hardships that Brexit would impose.

On the 10th of December, 2018, the European Court of Justice ruled that the U.K. could individually revoke its Brexit application to remain in the EU.3. Approve a negotiated deal. The sticking point had been the nature of the border between the U.K.’s Northern Ireland and the EU’s Republic of Ireland.The very fact that things still look uncertain, makes everyone believe that many voters regret the decision of Brexit, but the British Government remain dedicated to this decision, whether they have to now or really do believe in Brexit, is up for negotiation, but we know for a fact that on January 31st, 2021, the U.K. will officially leave the EU and as Johnson repeatedly states, the U.K will “prosper mightily” post Brexit.

It remains to be seen, whether a full deal will come into play and be decided or not.I personally believe that Brexit was a mistake and will hurt the U.K more than it will benefit them as I believe strength comes in unity, and the European Union is a Union that benefits all within, even though there are a few disadvantages of the Union, the benefits outweigh them by a lot. The trade deals, lack of VAT / customs, freedom of movement and many more advantages are all factors that strengthen each individual country and lend as a support system in times of need.

Sources:1. The Electoral Commission. “Results and Turnout at the EU Referendum,” https://www.electoralcommission.org.uk/…/results-and…

2. U.K. Parliament. “Brexit Timeline: Events Leading to the U.K.’s Exit from the EuropeanUnion”. https://commonslibrary.parliament.uk/research…/cbp-7960/

3. U.K. Parliament “The October 2019 EU U.K. Withdrawal Agreement” https://commonslibrary.parliament.uk/research…/cbp-8713/

4. Department for Exiting the European Union. “EU (Withdrawal Agreement) Bill Overview”

5. U.K. Parliament. “The U.K.’s EU Withdrawal Agreement (2018)” https://commonslibrary.parliament.uk/research…/cbp-8453/

6. University of Edinburg, Centre on Constitutional Change. “Can Scotland Leave the U.K. and Remain in the EU?” https://www.centreonconstitutionalchange.ac.uk/…/can…

7. Visual Journalism Team, BBC News, “No- Deal Brexit: 10 Ways it could Affect you”, 11 October 2019. https://www.bbc.co.uk/news/uk-politics-47470864

8. The Week, “Brexit: what are the pros and cons of leaving the EU?”, 6 OCT 2020 HTTPS://WWW.THEWEEK.CO.UK/BREXIT-0

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