Historians will never forget June 23, 2016, when the UK withdrew from the European after conducting highly contested and controversial elections. With a mere margin of only 4 percent, the decision to leave European was officially taken. The UK voted to leave the EU by 52% to 48%. With the proportion of people opting to get a vast majority of votes in England and Wales, each UK council democratically decided to leave the European.
The departure of the European Union set forth the dawn of a new era for the United Kingdom. The process to officially leave the EU was taken on December 31, 2020. This decision of the United Kingdom was termed as “British Exit” and was later o nicknamed Brexit. UK has been a part of the economic and policy unit of the EU since 1973. But things changed in 2016. In short, the residents of the UK decided to leave the EU since they believed that the benefits provided by free trade were not enough to offset the costs of free movement of immigration.
The nationalist movement against Brexit undoubtedly divided the UK since 17.4 million voted in favor of leaving while 16.1 million voted to remain a part of Brexit. The foundation of a new trade agreement between the U.K and EU was laid down under which the tariff-free status of the region was significantly affected.
Here at Talk Home, we will discuss the impacts Brexit had on the UK and the multiple levels at which the socio-political dynamics of the UK were changed from this step. Moreover, with our guide about living in the UK after, you will also get better information about the socio-political change brought in the UK after this.
Table of Contents
The Major Factor that Led to Brexit
The Conservative Party first proposed the referendum in 2015. The majority of pro-Brexit voters in England’s countryside were older, working-class people. 23 They were concerned about the free movement of immigrants and refugees, arguing that residents from poorer nations were stealing jobs and benefits.
EU fees irritated small firms as well. Others believed that exiting the EU would result in employment creation. Many people believe the United Kingdom contributes more to the EU than it receives.
The majority of those who voted to remain in the EU were from London, Scotland, and Northern Ireland. They supported free trade with the EU and stated that most EU immigrants were young and eager to work. Most people believed that leaving the EU would harm the United Kingdom’s international standing.
The Brexit Process
For the UK, the act of leaving the EU was tough. Former UK Prime Minister Theresa May filed the Article 50 withdrawal notification to the EU on March 29, 2017, by the people’s will. She drafted a separation agreement with the EU outlining their new relationship, but a divided Parliament refused to approve it.
Boris Johnson took over as Prime Minister of the United Kingdom in July 2019. Johnson’s Conservative Party won a majority following a royally required general election on December 12, 2019. As a result, he could have the Withdrawal Agreement he negotiated with the EU approved by Parliament.
The Agreement Act gained the necessary legislative Royal Assent on January 23, 2020, which means the Queen formally agrees to sign the measure into law. 4 The United Kingdom formally exited the EU on January 31, 2020. However, a transition period began on December 31, 2020, and ended on December 31, 2020. On December 24, 2020, the EU-UK Trade and Cooperation Agreement was signed (and signed on December 30).
How is Brexit Impacting the UK?
Brexit has already harmed the United Kingdom. The economy has stalled, and many businesses have relocated to the European Union. 13 Here are some of the effects on job creation and growth. There would also be ramifications for Ireland, London, and Scotland separately.
Impact on the Economic Growth of the UK
The most significant consequence of Brexit is the harm it causes to the UK’s economic growth. The majority of this is due to the ambiguity around the eventual result. Brexit uncertainty has slowed the United Kingdom’s growth from 2.4 percent in 2015 to 1.6 percent in 2019.
14 Brexit, according to the UK government, may reduce the country’s growth by up to 6.7 percent over the next 15 years. It assumed current free-trade terms but limited immigration. The British pound dropped from $1.48 on referendum day to $1.36 the next day. This benefits exporters but raises import prices. It still hasn’t recovered its pre-Brexit high.
Impact on the Job Market of the UK
The younger generation in the United Kingdom suffers as a result of Brexit. By 2030, Germany is expected to have a 3 million skilled workforce deficit. 17 After Brexit, those jobs will be harder for British people.
Employers are having a difficult time hiring qualified candidates. One explanation is that EU-born workers fled the UK in droves, with their numbers plummeting by 95% in 2017. The low-skilled and medium-skilled occupations have been the hardest hit.
Impact on Ireland
Northern Ireland is still part of the United Kingdom. The Republic of Ireland, with which it shares a border, continues to be a member of the European Union. The accord eliminates a customs border between the two Irish nations.
The Troubles, a 30-year struggle in Northern Ireland between primarily Catholic Irish nationalists and pro-British Protestants, may have been revived by a customs barrier. It concluded in 1998 with the assurance of no Northern Ireland-Ireland border. About 9,300 commuters would have been compelled to travel through customs to and from work and school if there had been a customs barrier.
Impact on London
Brexit has already slowed growth in London, the United Kingdom’s financial capital, which saw only 1.4 percent growth in 2018 and was close to zero in 2019. Between 2016 and 2019, company investment fell by 11% due to Brexit.
Interesting Read: The Ultimate 4-day Itinerary for Exploring London
International businesses are less likely to choose London as an English-language entry point into the EU economy. Five thousand clients were transferred to Barclay’s Irish affiliate, while 10% of clients were transferred to Goldman Sachs, JP Morgan, and Morgan Stanley. In addition, 100 bankers have been shifted to Bank of America’s Dublin branch, and 400 broker-dealers have been moved to Paris.
Impacts on Scotland
Scotland voted no to leaving the EU. According to the Scottish government, staying in the EU was the most excellent option for Scotland and the United Kingdom. It had been pressuring the British government to enable a second referendum to be held.
Scotland would have to hold an independence referendum to leave the United Kingdom. It would be able to apply for EU membership after that.
How is Brexit going to Impact the European Union?
Brexit is an anti-globalization vote. As a result, it has weakened pro-integration forces in the EU. In France and Germany, members of right-wing anti-immigration parties are notably anti-EU. They might compel an anti-EU vote if they win enough ground. The EU would lose its most robust economy and collapse if one of those countries left.
The bulk of EU people, on the other hand, remain staunch supporters of the union. According to a Pew Research Center poll of ten European countries, nearly 75% believe the EU promotes peace, and 55% feel it produces wealth. Furthermore, more than a third believe the United Kingdom’s influence is dwindling.
How is Brexit Impacting the Relationship of the UK with the US?
The standing of London as a worldwide financial center has been thrown into doubt as a result of Brexit. The stability of the United States, on the other hand, means that London’s loss might be New York’s benefit.
The currency markets were in chaos the day following the Brexit vote. The euro dropped by 2% to $1.11.26. The pound fell by 8% to $1.36.16. The dollars’ worth increased as a result of both of these events. The stock markets in the United States do not benefit from this strength. For international investors, it raises the cost of American stocks.
Shipments from the United States to the United Kingdom are likewise more expensive due to the weak pound, yet this hasn’t halted exports. Exports from the United States to the United Kingdom totaled $147.4 billion in 2019, up from $141 billion in 2018. As a result, there is a $21.8 billion trade surplus. Meanwhile, imports were only $125.6 billion.
Businesses operating in Europe have seen their expansion stifled due to Brexit. In 2019, American companies invested $851.4 billion in the United Kingdom. Most of the financial and insurance industries and manufacturing and nonbank holding firms accounted for most.
Now that we have discussed the changes brought by Brexit, let us look into life after Brexit and what will change for the people when the UK is going to be free from EU rules.
Changes in the life of people after Brexit
Free movement has come to an end
The rules on freedom of movement, for example, will be phased out starting in January 2021. (a conditional, not absolute right of EU citizens to move to other EU countries to live and work). EU residents will no longer be able to work and settle in the United Kingdom, and vice versa.
Following new laws, the United Kingdom will implement a new immigration policy in January 2021. EU nationals will no longer be given preferential treatment under the proposed points-based system to attract qualified workers.
According to a government strategy document released in February 2020, one of the goals is to remove “Europe’s reliance on cheap labor.” Meanwhile, British residents living in one EU country to freely travel to other EU countries after Brexit — a freedom they have had— was not addressed in the divorce agreement. According to current plans, this right will expire in 2021.
Rights to Residency
EU residents currently in the UK by the end of 2020 — and Britons living on the continent — have the right to stay and keep their current ownership in areas such as employment and social security. This is by the legally binding requirements of the Brexit divorce agreement.
In the future, however, residence permits will be required. Many EU nationals in the UK have expressed dissatisfaction with how the new arrangements are working out in practice, particularly given the British government’s lack of any absolute residency permits.
Regulations for travel
From 2021, the EU has warned that entrance to the EU will be more difficult for UK visitors. According to a document published by the European Commission in July, Britons will be “subject to extensive checks” at crossings when entering EU countries (except Ireland) and the Schengen area. They will be “regarded as third-country nationals.”
According to the Schengen Borders Code, UK citizens do not need visas to stay in EU nations for up to 90 days in any 180 days as long as they do not work. According to the British government, UK travelers should make sure their passports are valid for at least six months and are under ten years old.
The possibility that Britons may no longer be able to spend as much time as they like in their second homes on the continent has prompted fury in the British press and on social media. Non-EU citizens, on the other hand, have always been subject to these rules.
Interesting Read: UK Travel Guide – Everything You Need Before You Plan Your Visit
Health Insurance
The European Health Insurance Card (EHIC) scheme allowed UK and EU individuals to use state-run healthcare while traveling overseas. This includes pre-existing conditions and concerns related to labor and pregnancy. However, it does not guarantee free care or serves as a substitute for travel insurance.
In general, the post-Brexit agreement allows UK and EU travelers visiting each other’s territory to continue to get healthcare, subject to specific criteria. However, according to UK government advice, most Britons traveling to EU countries would need to purchase travel insurance that includes medical coverage, as they will not be able to receive free care otherwise.
After December 31, 2020, Britons traveling Europe will be able to use their EHIC cards in EU27 nations until they expire. Still, they will no longer be valid for new visits to Switzerland or the EEA countries of Norway, Iceland, and Lichtenstein.
From 2021, UK retirees currently living in the EU, UK students already studying there, EU nationals already living in the UK, and “border workers” — persons who live in one country but work in another — can apply for UK-issued EHIC cards for European visits.
Asylum Seekers
In some cases, the EU’s Dublin laws allow EU governments to return asylum seekers to an EU country they passed through. The British government wants a new agreement, but there may not be a Europe-wide legal framework for the UK to return asylum-seekers to other countries once the transition period ends.
The UK is likely to rely on bilateral agreements with other countries, such as France, even though these arrangements do not protect persons who come to the UK and seek asylum.
Conclusion
Brexit will inevitably influence the size of the UK economy by impacting growth, trade, and employment. According to UK economy figures, the country will have its worst economic performance in almost a decade in 2020, with a growth rate of barely 1.0 percent. The uncertainty surrounding the conclusion of Brexit has threatened to shift the focus of the financial world away from the United Kingdom. According to analysts, London would struggle to preserve its standing as a global financial hub, and its loss could benefit New
