IMPLICATIONS OF BREXIT

REVISION NOTES

Background
• Britain is scheduled to depart the EU at 11pm on Friday 29 March, 2019.
• The EU and Britain have agreed on a 21-month "transition" period to smooth the way to
post-Brexit relations.
• This transition will come to an end on 31 December, 2020.
Trade
• The EU is the UK's main trading partner. Exports to EU countries were around £274
billion in 2017 which accounts for 44% of UK exports. Over one-in-ten British jobs are
directly linked to EU membership. This suggests that the UK benefits economically from
being in the EU.
• When the UK leaves the EU it is estimated by the CBI, by 2020, 950,000 jobs could be
lost as global manufacturers might choose to move to lower-cost EU countries.
• Sectors linked to EU membership such as aerospace could suffer. Airbus production
could move to Toulouse in France from Cardiff in Wales.
• Britain will have to renegotiate trade deals with individual EU member countries, perhaps
on worse terms than we currently have inside the EU. The CBI estimate that by 2020 the
cost of Brexit to the UK economy could be £100 billion.
• The UK population is 60 million but as part of the EU, UK businesses have access to a
larger single market of 500 million EU citizens, and UK citizens have access to a much
wider variety of businesses and European shops such as Lidl to choose from, giving UK
consumers more choice.
• This increased business competition should also keep prices low. However with Brexit
prices will rise due to less competition. Individual families could be £3700 less well off.
• Analysis of the impact of Brexit showed every possible post-Brexit relationship between
the UK and the EU will make the UK economically worse off.
• If the UK ends up with the ‘softest’ Brexit, its economy will be 2% worse off, but a ‘hard’,
no-deal Brexit will make the economy 15% worse off over 15 years.
• Leaving the EU will therefore damage the UK economically but the degree of this
damage will depend on the type of relationship the UK achieves with the EU zone after
negotiations, the hardest of Brexit’s bringing the most damaging outcomes.
• However critics of the EU accuse its supporters of ‘scaremongering’ with threats of
economic instability and job losses when Britain leave.
• Critics point to the high cost of EU membership. The ONS in 2017 identified that the UK
Government’s average annual net contribution to the EU for the years 2012 to 2016 was
£9.4 billion.
• UK exports to the rest of the world were higher than UK exports to the EU for a ninth year
in a row in 2017. Exports to non-EU countries amounted to around £342 billion in 2017,
showing the worldwide demand for British goods and services remains.
• Leaving the EU has possible trade benefits for the UK.
• Brexiteer’s argue that this will allow the UK to arrange Free Trade deals with individual
countries. President Trump and Prime Minister Ardern of New Zealand have expressed
interest to quickly establish post-Brexit trade deals with the UK.
Immigration
• EU law guarantees that citizens of one EU country have the right to travel, live, and take
jobs in other EU countries. There are one million Brits living in Spain. British
people are currently taking advantage of freedom of movement.
• Immigration from the EU advantages the UK economically as many EU migrants are
 skilled and work in key UK services like the NHS, which arguably could not cope
without doctors and nurses from the EU.
• European immigrants are half as likely as UK natives to receive state benefits or tax
credits, according to a study by academics at University College London.
• However being part of the EU has resulted in too many immigrants from other EU
countries.
• Recently poorer Eastern European countries such Bulgaria and Romania have joined
the EU, and there are fears that citizens from these countries can freely move to the UK
to take advantage of our more generous welfare system or to work for less and drive
down British wages.
• Immigration has been further increased by the recent European migrant crisis as EU
countries have tried to take their share of refugees fleeing conflict in Syria.
• By leaving the EU, the UK will gain full control of its own borders and be able to control or
stop, the flow of migrants from the EU.
• Some argue that the UK could have a more sensible immigration system if it didn’t
have to follow EU rules.
• EU rules require the UK to admit all EU citizens who wants to move to Britain, whether
or not they have good job prospects or English skills.
• Brexiteer’s argue that the UK should be focused on admitting immigrants who will
bring valuable skills to the country and integrate well into British culture.
• They argue in favour of a points based system such as the one used in Australia which
award potential migrants points based on factors like language and job skills, education
and age.
Sovereignty- Law Making
• British workers benefit from EU employment laws and social protections. The Working
Time Directive, which gives all EU workers the right to a minimum number of holidays
each year as well as rest breaks.
• When Britain leaves the EU, this protection for workers could potentially be lost,
leading to excessive working hours and causing stress.
• Many of our human rights, working rights, and food and safety standards are based
on EU laws. There is a fear that human rights and workers’ rights may be removed to
make it easier for businesses to operate in the UK and make profits.
• If we introduce lower standards of safety in our products or food we will find it difficult
to sell them into the EU market as they will not comply with their standards, which
could be damaging to our economy, especially to small and medium-sized enterprises.
• However, Britain has retained complete control over foreign affairs and many other areas,
such as health, education and crime.
• Britain also has a long tradition of opting out of Europe-wide laws and policies,
including currency union.
• By leaving the EU the UK will regain sovereignty and control over its own law and legal
affairs.
• The UK Parliament, Scottish Parliament and the UK Supreme Court will now be the main
creators and interpreters of laws in the UK rather than the EU, whose laws and legal
decisions currently override those of the UK.
• Too many British laws have arisen from EU directives on subjects such as food
labelling, vacuum cleaner power and the curvature of cucumbers and bananas.
• Also the European Commission, isn’t directly accountable to voters in Britain or anyone
else. British leaders have some influence on the selection of the European
Commission’s members every five years. But once the body has been chosen none
of its members are accountable to the British government.
Tourism
• The UK and Scottish tourism industry has gained from Brexit as many more UK residents have
holidayed at home and international visitors are getting better value for their money.
• 14.1 million people visited Scotland in 2017.
• Edinburgh is second only to London as a UK destination. The new V&A Dundee
opened in September 2018 and looks certain to become another "must-see
destination" for many travelers.
• There are concerns about filling jobs post Brexit.
• Scotland benefits from having EU nationals, both high quality employees with language
skills to engage with tourists and low skilled workers who carry out jobs native Scots
do not want to do.
• Those who holiday abroad are still receiving less for the pound than the pre-Brexit vote.