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This article outlines the predicted impact of a potential withdrawal of the United Kingdom (UK) from the European Union (EU), known informally as Brexit.

Whether the UK leaves with a withdrawal agreement or alternatively without any withdrawal agreement ("no-deal" Brexit) will affect future impacts, particularly in connection with the location of EU agencies and the regulation and control of cross-border outward and inward movements of persons and animals, of goods for export and import, and of financial and other transactions.[1]

Contents

AcademiaEdit

According to a 2016 study by Ken Mayhew, Emeritus Professor of Education and Economic Performance at Oxford University, Brexit posed the following threats to higher education: "loss of research funding from EU sources; loss of students from other EU member states; the impact on the ability of the sector to hire academic staff from EU member states; and the impact on the ability of UK students to study abroad."[2] The UK received more from the European agencies and institutions for research than it financially contributed[3][4] with universities getting just over 10% of their research income from the European agencies and institutions.[5] All funding for net beneficiaries from European agencies and institutions, including universities, was guaranteed by the British government in August 2016.[6] Before the funding announcement, a newspaper investigation reported that some research projects were reluctant to include British researchers due to uncertainties over funding.[7] Currently the UK is part of the European Research Area and the UK is likely to wish to remain an associated member.[8]

Border between the UK and Republic of IrelandEdit

The UK/Republic of Ireland border crosses this road at Killeen (near Newry), marked only by a speed limit in km/h. (Northern Ireland uses mph.)

There is concern about whether the border between the Republic of Ireland and Northern Ireland becomes a "hard border" with customs and passport checks on the border,[9] and whether this could affect the Good Friday Agreement that brought peace to Northern Ireland.[10][11][12] In order to forestall this the European Union proposed a "backstop agreement" within the Withdrawal Agreement that would put Northern Ireland under a range of EU rules in order to forestall the need for border checks. Although the UK government has signed off on proposals including the backstop, it regards the idea of having EU rules applying in Northern Ireland only as a threat to the integrity of the UK, and also does not want the UK as a whole to be subject to EU rules and the customs union indefinitely.[13]

Until October 2019, both the UK and Ireland will be members of the EU, and therefore both are in the Customs Union and the Single Market. There is freedom of movement for all EU nationals within the Common Travel Area and there are no customs or fixed immigration controls at the border. Since 2005, the border has been essentially invisible.[14] Following Brexit, the border between Northern Ireland and the Republic of Ireland will become a land border between the EU and a non-EU state which may entail checks on goods at the border or at Irish ports, depending on the co-operation and alignment of regulations between the two sides. It is therefore possible that the border will return to being a "hard" one, with fewer, controlled, crossing posts and a customs infrastructure. Both the EU and the UK have agreed this should be avoided.[15] A February 2019 report by Irish Senator Mark Daly and two UNESCO chairmen indicated that reinstating a hard border would result in the return of violence.[16]

In March 2019, the UK government announced that it would not perform customs checks at the Irish border after a no-deal Brexit and acknowledged that that might present a smuggling risk.[17][18][19] On 17 March the President of Ireland signed into law the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019.[20]

Border with FranceEdit

The President of the Regional Council of Hauts-de-France, Xavier Bertrand, stated in February 2016 that "If Britain leaves Europe, right away the border will leave Calais and go to Dover. We will not continue to guard the border for Britain if it's no longer in the European Union," indicating that the juxtaposed controls would end with a leave vote. French Finance Minister Emmanuel Macron also suggested the agreement would be "threatened" by a leave vote.[21] These claims have been disputed, as the Le Touquet 2003 treaty enabling juxtaposed controls was not an EU treaty, and would not be legally void upon leaving.[22]

After the Brexit vote, Xavier Bertrand asked François Hollande to renegotiate the Le Touquet agreement,[23] which can be terminated by either party with two years' notice.[24] Hollande rejected the suggestion, and Bernard Cazeneuve, the French Interior Minister, confirmed there would be "no changes to the accord."[25]

Economic effectsEdit

Economists expect that Brexit will have damaging immediate and longer term effects on the economies of the UK and at least part of the 27 other EU member states. In particular, there is a broad consensus among economists and in the economic literature that Brexit will likely reduce the UK's real per capita income in the medium and long term, and that the Brexit referendum itself damaged the economy.[a][39] Studies on effects since the referendum show a reduction in GDP, trade and investment, as well as household losses from increased inflation.

ImmediateEdit

According to one study, the referendum result had pushed up UK inflation by 1.7 percentage points in 2017, leading to an annual cost of £404 for the average British household.[40] Studies published in 2018, estimated that the economic costs of the Brexit vote were 2.1% of GDP,[41][42] or 2.5% of GDP.[43] According to a December 2017 Financial Times analysis, the Brexit referendum results had reduced national British income by between 0.6% and 1.3%.[44] A 2018 analysis by Stanford University and Nottingham University economists estimated that uncertainty around Brexit reduced investment by businesses by approximately 6 percentage points and caused an employment reduction by 1.5 percentage points.[45] A number of studies found that Brexit-induced uncertainty about the UK's future trade policy reduced British international trade from June 2016 onwards.[46][47][48][49][50] A 2019 analysis found that British firms substantially increased offshoring to the European Union after the Brexit referendum, whereas European firms reduced new investments in the UK.[51][52]

In the long termEdit

There is overwhelming or near-unanimous agreement among economists that leaving the European Union will adversely affect the British economy in the medium- and long-term.[b][39] Surveys of economists in 2016 showed overwhelming agreement that Brexit would likely reduce the UK's real per-capita income level.[29][30][31] 2019 and 2017 surveys of existing academic research found that the credible estimates ranged between GDP losses of 1.2–4.5% for the UK,[39] and a cost of between 1–10% of the UK's income per capita.[27] These estimates differ depending on whether the UK exits the EU with a hard Brexit or soft Brexit.[27] In January 2018, the UK government's own Brexit analysis was leaked; it showed that UK economic growth would be stunted by 2–8% in total over the 15 years following Brexit, the amount depending on the leave scenario.[53][54]

According to most economists, EU membership has a strong positive effect on trade and as a result the UK's trade would be worse off if it left the EU.[55][56][57][58] According to a study by University of Cambridge economists, under a "hard Brexit" whereby the UK reverts to WTO rules, one-third of UK exports to the EU would be tariff-free, one-quarter would face high trade barriers and other exports risk tariffs in the range of 1–10%.[59] A 2017 study found that "almost all UK regions are systematically more vulnerable to Brexit than regions in any other country."[60] A 2017 study examining the economic impact of Brexit-induced reductions in migration" found that there would likely be "a significant negative impact on UK GDP per capita (and GDP), with marginal positive impacts on wages in the low-skill service sector."[61][27] It is unclear how changes in trade and foreign investment will interact with immigration, but these changes are likely to be important.[27]

With Brexit, the EU would lose its second-largest economy, the country with the third-largest population and "the financial capital of the world", as the German newspaper Münchner Merkur put it.[62] Furthermore, the EU would lose its second-largest net contributor to the EU budget (2015: Germany €14.3 billion, United Kingdom €11.5 billion, France €5.5 billion).[63] Thus, the departure of Britain would result in an additional financial burden for the remaining net contributors, unless the budget is reduced accordingly: Germany, for example, would have to pay an additional €4.5 billion for 2019 and again for 2020; in addition, the UK would no longer be a shareholder in the European Investment Bank, in which only EU members can participate. Britain's share amounts to 16%, €39.2 billion (2013), which Britain would withdraw unless there is an EU treaty change.[64]

All the remaining EU members (as well as Switzerland, Norway and Iceland) will also likely experience adverse effects (albeit smaller effects than the UK), in particular Ireland, the Netherlands and Belgium.[65][66][67]

In the short termEdit

Short-term macroeconomic forecasts by the Bank of England and other banks of what would happen immediately after the Brexit referendum were too pessimistic.[33][68] The assessments assumed that the referendum results would create greater uncertainty in markets and reduce consumer confidence more than it did.[68] A number of economists noted that short-term macroeconomic forecasts are generally considered unreliable and that they are something that academic economists do not do, unlike banks.[69][70][68][27][33] Economists have compared short-term economic forecasts to weather forecasts whereas the long-term economic forecasts are akin to climate forecasts: the methodologies used in long-term forecasts are "well-established and robust".[68][69][27][71]

Regional inequality in UKEdit

Studies on the economic impact that different forms of Brexit will have on different parts of the country indicate that Brexit will exacerbate regional economic inequality in the UK, as already struggling regions will be hardest hit by Brexit.[72]

UK financial sectorEdit

Economists have warned that London's future as an international financial centre depends on whether the UK will obtain passporting rights for British banks from the European Union. If banks located in the UK cannot obtain passporting rights, they have strong incentives to relocate to financial centres within the EU.[73][74] According to John Armour, Professor of Law and Finance at Oxford University, "a 'soft' Brexit, whereby the UK leaves the EU but remains in the single market, would be a lower-risk option for the British financial industry than other Brexit options, because it would enable financial services firms to continue to rely on regulatory passporting rights."[74]

EnergyEdit

According to a 2017 study by the University of Exeter and Chatham House researchers, there are considerable benefits for the UK to be integrated into the European energy market. The study notes, "if the UK wants to enjoy the economic benefits of remaining part of what is an increasingly integrated European electricity market then, as European legislation is currently drafted, it will not only have to forgo an element of autonomy through accepting legislation and regulations made collectively at the EU level, but it will also lose much of its voice in that decision making process, effectively becoming a rule-taker rather than a rule-maker."[75]

European Union institutionsEdit

Council of the European UnionEdit

Analyses indicate that the departure of the relatively economically liberal UK will reduce the ability of remaining economically liberal countries to block measures in the Council of the European Union.[76][77] According to the Lisbon Treaty (2009), decisions of the Council are made by qualified majority voting, which means that a majority view can be blocked should at least four members of the Council, representing at least 35% of the population of the Union, choose to do so. In many policy votes, Britain, allied with other northern EU allies (Germany, Ireland, the Netherlands, the Scandinavian and the Baltic states), had a blocking minority of 35%.[78][79]

European ParliamentEdit

UK MEPs are expected to retain full rights to participate in the European Parliament up to the Article 50 deadline. However, there have been discussions about excluding UK MEPs from key committee positions.[80]

The EU will need to decide on the revised apportionment of seats in the European Parliament in time for the next European Parliament election to be held in May 2019 (with the parliamentary term starting in June), when the United Kingdom's 73 MEPs will have vacated their seats. In April 2017, a group of European lawmakers discussed what should be done about the vacated seats. One plan, supported by Gianni Pittella and Emmanuel Macron, is to replace the 73 seats with a pan-European constituency list; other options which were considered include dropping the British seats without replacement, and reassigning some or all of the existing seats from other countries to reduce inequality of representation.[81][82]

FisheriesEdit

The combined EU fishing fleets land about 6 million tonnes of fish per year,[83] of which about 3 million tonnes are from UK waters.[84] The UK's share of the overall EU fishing catch is only 750,000 tonnes (830,000 tons).[85] This proportion is determined by the London Fisheries Convention of 1964 and by the EU's Common Fisheries Policy. The UK government announced in July 2017 that it would end the 1964 convention in 2019. Loss of access to UK waters will particularly affect the Irish fishing industry which obtains a third of its catch there.[86]

According to an analysis by researchers at Wageningen University and Research, Brexit would lead to higher prices in seafood for consumers (because the UK imports most of its seafood). British fishermen would be able to catch more fish, but the price for UK fish would decline. As a result, the analysis found that Brexit would result in a "lose-lose situation" for both the UK and the EU, and for both British consumers and the fishing industry.[87] According to a 2018 study, "Brexit poses a major challenge to the stability of European fisheries management. Until now, neighbouring EU Member States have shared the bounty of the living resources of the seas around Britain. Taking full responsibility for the regulation of fisheries within the UK's Exclusive Economic Zone will cut across longstanding relationships, potentially putting at risk recent recovery and future sustainability of shared fish stocks."[88]

Gibraltar and SpainEdit

Cars crossing into Gibraltar clearing customs formalities. Gibraltar is outside the customs union, VAT area and Schengen Zone.

Gibraltar is outside the European Union's common customs area and common commercial policy and so has a customs border with Spain. Nevertheless, the territory remains within the European Union until Brexit is complete.

During the Brexit referendum campaign, the Chief Minister of Gibraltar warned that Brexit posed a threat to Gibraltar's safety.[89] Gibraltar voted overwhelmingly (96 per cent) to remain in the EU. After the result, Spain's Foreign Minister renewed calls for joint Spanish–British control of the peninsula.[90] These calls were strongly rebuffed by Gibraltar's Chief Minister[91] and questions were raised over the future of free-flowing traffic at the Gibraltar–Spain border.[92] The UK government states it will only negotiate on the sovereignty of Gibraltar with the consent of its people.[93]

In February 2018, Sir Joe Bossano, Gibraltar's Minister for Enterprise, Training, Employment and Health and Safety (and former Chief Minister) expressed frustration at the EU's attitude, suggesting that Spain was being offered a veto, adding "It's enough to convert me from a supporter of the European Union into a Brexiteer".[94]

In April 2018, Spanish Foreign Minister Alfonso Dastis said that the Spanish had a long-term aim of "recovering" Gibraltar, but that Spain would not hold Gibraltar as a "hostage" to the EU negotiations.[95] In 2018, a new Spanish government stated that its policy on the issue remained unchanged.[96]

HealthEdit

A 2019 study in the Lancet suggested that Brexit would have an adverse impact on health in the UK under every Brexit scenario, but that a no-deal Brexit would have the worst impact.[97] The study found that Brexit would deplete the National Health Service (NHS) workforce, create uncertainties regarding care for British nationals living in the EU, and put at risk access to vaccines, equipment, and medicines.[97]

Legal systemEdit

The UK's exit from the European Union will leave Ireland and Cyprus as the only two remaining common law jurisdictions in the EU. Paul Gallagher, a former Attorney General of Ireland, has suggested this will isolate those countries and deprive them of a powerful partner that shared a common interest in ensuring that EU legislation was not drafted or interpreted in a way that would be contrary to the principles of the common law.[98] Lucinda Creighton, a former Irish government minister for legal affairs, has said that Ireland relies on the "bureaucratic capacity of the UK" to understand, influence and implement EU legislation.[99]

MigrationEdit

Studies estimating the long-term impact of Brexit on immigration note that many factors affect future migration flows but that Brexit and the end of free movement will likely result in a large decline in immigration from EEA countries to the UK.[100][101] The Migration Policy Institute estimated immediately after the referendum that the UK "would continue to receive 500,000 or more immigrants (from EU and non-EU countries taken together) per year, with annual net migration around 200,000".[102] The decline in EEA immigration is likely to have an adverse impact on the British health sector.[103] According to the New York Times, Brexit "seems certain" to make it harder and costlier for the NHS, which already suffers from chronic understaffing, to recruit nurses, midwives and doctors from the rest of Europe.[103]

Official figures for June 2017 (published in February 2018) showed that net non-British EU immigration to the UK slowed to about 100,000 immigrants per year (corresponding to the immigration level of 2014) while immigration from outside the European Union increased. Taken together, the two inflows into the UK resulted in an only slightly reduced net immigration of 230,000 newcomers in the year to June 2017. The Head of the Office of National Statistics suggested that Brexit could well be a factor for the slowdown in EU immigration, but cautioned there might be other reasons.[104] The number of non-British EU nurses registering with the NHS fell from 1,304 in July 2016 to 46 in April 2017.[105]

Since the referendum, British citizens have attempted to ensure their retention of EU citizenship via a number of different mechanisms, including applying to other EU member states for citizenship,[106][107] and petitioning the European Commission.[108]

Currently, EEA sportspersons face minimal bureaucracy to play or perform in the UK. After Brexit, any foreigner wanting to do so more than temporarily could need a work permit. Such work permits can be tricky to obtain, especially for young or lower ranked players. Conversely, British nationals playing in EEA states may encounter similar obstacles where none exist today.[109][110]

Moving agenciesEdit

Brexit requires the offices and staff of the European Medicines Agency and European Banking Authority, which were based in London, to move out of the UK.[111] The agencies, which together employ more than 1,000 people, moved respectively to Amsterdam and Paris.[112] The EU is also considering restricting the clearing of euro-denominated trades to eurozone jurisdictions, which would end London's dominance in this sector.[113]

TransportEdit

AviationEdit

Flights between the UK and the 27 EU countries are enshrined into the European Common Aviation Area. The UK Government's aviation guidance document states that post-Brexit: "UK and EU licensed airlines would lose the automatic right to operate air services between the UK and the EU without seeking advance permission. This would mean that airlines operating between the UK and the EU would need to seek individual permissions to operate."[114] The loss of automatic access to the European Common Aviation Area will affect airlines; for instance a British registered airline cannot operate intra-EU flights, nor can a European registered airline operate domestic UK flights. Some British airlines created European divisions to resolve the issue. The European Aviation Safety Agency will no longer cover UK airlines.[115] In the event of a No Deal Brexit, UK aviation would be seriously impaired, with higher fares and less options for British flyers.[116]

The UK has sought to replace the existing ECAA partnerships that the EU has with 17 non-EU countries. By the end of 2018, the UK had concluded individual air service agreements (ASA) with the United States,[117] Canada[117] Switzerland,[118] Albania, Georgia, Iceland, Israel, Kosovo, Montenegro and Morocco. Flights to and from these countries will continue as scheduled post-Brexit.[114]

The UK has separate bilateral air service agreements (ASA) with 111 countries, which permit flights to and from the country. As a result, there will be no change post-Brexit for airlines operating in these countries.[114]

RailEdit

The French minister for European Affairs, Nathalie Loiseau, said in September 2018 that trains in the Channel Tunnel may no longer be allowed into France in the event of a no-deal Brexit.[119] Discussions were carried out in October between the British Department for Transport and the rail transport authorities of France, Belgium and the Netherlands.[120] A temporary authorisation for three months was agreed in February 2019, ensuring transport continuity in the event of a no-deal Brexit.[121]

Road trafficEdit

The Vienna Convention on Road Traffic is written by the UN, not the EU, allowing road traffic between the UK and EU even without a deal.

The UK will remain in the European Common Transit Convention (CTC) after Brexit.[122] This would apply to any new trading relationship with the EU, including after exit with no Withdrawal Agreement treaty.[123] The CTC applies to moving goods between the EU member states, the EFTA countries (Iceland, Norway, Liechtenstein and Switzerland) as well as Turkey, Macedonia and Serbia. The CTC, with its supplementary Convention on the Simplification of Formalities in the Trade of Goods, reduces administrative burdens on traders by removing the need for additional import/export declarations when transiting customs territories, and provides cash flow benefits by allowing the movement of goods across a customs territory without the payment of duties until the final destination.[124]

In the event of a "no-deal" Brexit, the number of permits available to haulage drivers will be "severely limited": the Department for Transport proposes to allocate these by lottery.[125] Even with a customs union, the experience of Turkish hauliers suggests that significant difficulties and delays will occur both at the border and within some countries.[126]

ShippingEdit

Ferries will continue, but with obstacles such as customs checks.[127] New ferry departures between the Republic of Ireland and the European mainland have been established in anticipation of the Great Britain land bridge becoming congested, mainly with France, Spain, Belgium and the Netherlands.[127]

ScotlandEdit

First Minister of Scotland Nicola Sturgeon addresses journalists over Brexit and Scotland's place within Europe at Bute House.

As suggested by the Scottish Government before the referendum,[128] the First Minister of Scotland announced that officials were planning an independence referendum due to the result of Scotland voting to remain in the European Union when England and Wales voted to leave.[129] In March 2017, the SNP leader and First Minister Nicola Sturgeon requested a second Scottish independence referendum in 2018 or 2019 (before Britain's formal exit from the EU).[130] The UK Prime Minister immediately rejected the requested timing, but not the referendum itself.[131] The referendum was approved by the Scottish Parliament on 28 March 2017. Sturgeon called for a "phased return" of an independent Scotland back to the EU.[132]

After the referendum, First Minister Sturgeon suggested that Scotland might refuse consent for legislation required to leave the EU,[133] though some lawyers argued that Scotland cannot block Brexit.[134]

On 21 March 2018, the Scottish Parliament passed the Scottish Continuity Bill.[135] This was passed due to stalling negotiations between the Scottish Government and the British Government on where powers within devolved policy areas should lie after exit day from the European Union. This Act allows for all devolved policy areas to remain within the remit of the Scottish Parliament and reduces the executive power upon exit day that the UK Withdrawal Bill provides for Ministers of the Crown.[136] The bill was referred to the supreme court which found that it could not come into force as the European Union (Withdrawal) Act 2018, which received royal assent between the Scottish parliament passing its bill and the supreme court's judgement, designated itself under schedule 4 of the Scotland Act 1998 as unamendable by the Scottish Parliament.[137] The bill has therefore not received royal assent.[138]

SecurityEdit

Concerns have been raised that Brexit might create security problems for the UK. In particular in law enforcement and counterterrorism where the UK could use the European Union's databases on individuals crossing the British border. Security experts have credited the EU's information-sharing databases with helping to foil terrorist plots. British leaders have expressed support for retaining access to those information-sharing databases, but it could be complicated to obtain that access as a non-member of the EU. Brexit would also complicate extradition requests. Under a hard Brexit scenario, the UK would lose access to basic law enforcement tools, such as databases comprising European plane travel records, vehicle registrations, fingerprints and DNA profiles.[139]

UK bilateral international agreementsEdit

The Financial Times said that there were approximately 759 international agreements, spanning 168 non-EU countries, that the UK would no longer be a party to upon leaving the EU.[140] This figure does not include World Trade Organization or United Nations opt-in accords, and excludes "narrow agreements", which may also have to be renegotiated.[140]

UK-EU relationship post-BrexitEdit

The UK's post-Brexit relationship with the European Union could take several forms. A research paper presented to the UK Parliament in July 2013 proposed a number of alternatives to being a member state which would continue to allow access to the EU internal market. These include remaining in the European Economic Area,[141] negotiating deep bilateral agreements on the Swiss model,[141] or exit from the EU without EEA membership or a trade agreement under the WTO Option. There may be an interim deal between the time the UK leaves the EU and when the final relationship comes in force.

UK relations with CANZUK countries and the United StatesEdit

Pro-Brexit activists and politicians have argued for negotiating trade and migration agreements with the "CANZUK" countries—those of Canada, Australia, New Zealand and the United Kingdom.[142][143] Numerous academics have criticised this alternative for EU membership as "post-imperial nostalgia".[144][145][146] Economists note that distance reduces trade, a key aspect of the gravity model of trade, which means that even if the UK could obtain similar trade terms with the CANZUK countries as it had as part of the Single Market, it would be far less valuable to the UK.[147][148][149]

In August 2019 the U.S. Administration has said it is ready to negotiate a post-Brexit trade deal with the U.K. in pieces — rather than London's wish of a comprehensive pact.[150] But within a day it reversed course and agreed to contract a "very big trade deal".[151]

World Trade OrganizationEdit

Questions have arisen over how existing international arrangements with the EU under World Trade Organization (WTO) terms should evolve. Some countries—such as Australia and the United States—wish to challenge the basis for division (i.e., division between the UK and the continuing European Union) of the trade schedules previously agreed between them and the EU, because it reduces their flexibility.[152]

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