In June of 2016 a referendum on the United Kingdom’s membership in the European Union was held. With a vote of 51.9% to leave the Union, the government began the process of withdrawal. What has followed has been years of controversy, upheaval, and uncertainty. Originally the plan had been to formally withdraw on March 29, 2019.
The deadline has been moved several times already. It has been delayed a third time this month due to a law passed by the MPs called the Benn Act, though no new revised date has yet selected by the European Commission. It is even possible a new election might be called by Prime Minister Boris Johnson.
Where the House of Commons Stands
There are a number of different positions being taken by the different parties in the House of Commons. Though the Prime Minister has requested an election twice, not all of the MPs in the Conservatives are onboard. The Labour Party has insisted on a new election, but only if the possibility of a No-Deal Brexit is ended. The other parties have a range of responses to the possibility of a new election, from insisting different terms (SNP) to pressing for a new referendum instead (Plaid Cymru).
While all this remains in the air, what is becoming more clear is the degree a U.K. exit from the European Union is going to impact the country. These impacts will be felt across a range of economic sectors. If and when Brexit occurs, a lot of things will be changing.
- Academia: Brexit will result in threats to academia, such as the loss of E.U. research funding, fewer students entering university from European countries, and potential reductions in the ability of U.K. students to study abroad.
- Security: It is possible Brexit will have negative impacts on U.K. security as well. Without E.U. membership, it becomes more difficult to gain access to information-sharing databases that could help with the prevention of domestic terrorism and international crime. In a hard Brexit scenario, information on European plane travel records, registrations of vehicles, and personal identification information like fingerprints and DNA will all be at risk.
- Borders and State Relations: Following Brexit a number of border issues will result for the U.K. In terms of U.K.-Ireland, being that this would be the only land border between the U.K. and the E.U., a whole range of issues would come into debate about how hard or soft the border would be. The Good Friday Agreement that ended the Northern Ireland conflict would also potentially at risk. Issues regarding the sovereignty of Gibraltar (which voted at 96% to remain in the E.U.) and Scotland (which voted 62% to remain in the E.U.) might also receive more attention. Scotland in particular might continue to pursue another outright independence referendum.
- Economic Impacts: In the days after the vote to leave the E.U., U.K. inflation rose by as much as 1.7%, immediate economic impacts were estimated at being between 2% and 2.5% of GDP. Further, productivity was assessed as being down between 2% and 5%, and investment itself saw reductions of 11%. Credible estimates for future economic impacts will see GDP losses of between 1% and 4.5% for the U.K., and a cost of between 1% and 10% of the U.K.’s income per capita. Trade is projected to go down, and sectors like banking and service could see major overhauls. Though the U.K. might continue to be integrated in the E.U. energy market, by no longer being a member it will essentially have to follow rules that it has no role in creating. Lastly, the faming, fishery, health, and transport sectors might also see major changes, though not all will be bad for the economy of the U.K.
Time will tell what the final form Brexit will take, but in the meantime one thing is very clear. So long as no deal is agreed upon, economic and political uncertainty is going to continue to impose costs upon the U.K. economy and its population.