Consequences of Brexit

The United Kingdom’s landmark decision to exit the European Union, commonly known as Brexit, has undoubtedly been one of the most significant political events in recent history. The move, which was initiated in 2016, came to fruition on January 1, 2021, and has had far-reaching consequences both within the UK and beyond. This article aims to unpack some of the facets of these effects, from economic to political, cultural, and social impacts.

The UK is the only sovereign country to have left EU or its predecessors. The UK became a member of the European Communities (EC) on 1 January, 1973. The UK left the EU at 23:00 GMT on 31 January, 2020 (00:00 1 February, 2020 CET).

Economic Consequences

Brexit has triggered a series of economic changes. The most immediate was the devaluation of the British pound, which fell by approximately 10% against the US dollar on the day after the referendum. This led to increased inflation and a decrease in real wages, impacting the purchasing power of the British consumer. Of course, the forex market is notoriously volatile and short-term fluctuations are common. Only time will tell if Brexit will have any long-term effects on the GBP-USD exchange rate.

Moreover, Brexit has also resulted in more complicated trade relationships, at least for now. Leaving the EU has meant the UK is no longer part of the single market or customs union. While the newly signed UK-EU trade agreement ensures tariff-free trade in goods, businesses are now subjected to regulatory checks and customs declarations, creating increased costs and delays. Furthermore, the UK’s service sector, which accounts for 80% of its economy, has been left in uncertainty as it is largely excluded from the deal.

While Brexit was being negotiated, economists speculated that the UK leaving the union would have negative effects on both the UK and at least some of the remaining membership countries.

Legal consequences

Since Brexit, EU law and the Court of Justice of the European Union no longer have primacy over British laws.

The European Union (Withdrawal) Act 2018 retains relevant EU law as domestic law, which the UK can amend or repeal.

Political Consequences

Brexit has not only reshaped the economic landscape but also the political one. It has deepened divisions within the UK, raising questions about the future of the United Kingdom itself. In Scotland, where the majority voted for the UK to remain in the EU, notable voices has been calling for a second independence referendum.

Internationally, Brexit has changed the perception of the UK and led to a significant repositioning of the nation´s relationships with countries such as the United States and China.

Cultural and Social Consequences

Brexit has had profound cultural and social effects, and the decision to leave the EU has sparked intense debates about national identity. The vote exposed and widened a divide between those who see themselves primarily as European and those who identify as British.

In addition, Brexit has impacted migration. The end of free movement between the UK and the EU means that the UK can now control its borders and implement its points-based immigration system. This change has implications for the labour market, particularly the NHS and agriculture, sectors heavily reliant on EU migrant workers.

Irish border consequences

The border between the Republic of Ireland and Nortern Ireland was a hot potato leading up to the Brexit referendum. Since 2005, the border had been essentially invisible, as both sides were a part of the European Union.

Having a hard border following Brexit was undesirable for many reasons and could also be considered a violation of the Good Friday Agreement.

After negotiations, the Ireland/Northern Ireland Protocol was established by the UK and the EU. Since Brexit, Northern Ireland has been outside the EU single market, but the protocol ensures that EU free movement of goods rules and EU Customs Union rules still applies. There is no customs check or control on any side of the border. The protocol has created a de facto Irish Sea customs border for goods from, but not to, Great Britain.

French border consequences

In accordance with the Le Touquet Agreement, UK border checks can be completed in France and French border checks can be completed in the UK. In 2018, the two governments signed the Sandhurst Agreement to quicker process migrants attempting to reach the UK from Calais.

Spanish border consequences

Located at the southern tip of the Iberian Peninsula, Gibraltar is a British Overseas Territory whose only land border is with Spain. The situation is tense, as Spain asserts a territorial claim on Gibraltar, and after the Brexit referendum, Spain’s Foreign Minister renewed calls for joint Spanish–British control.

Since Brexit, Gibraltar is no longer a part of the European Union, but is instead a participant in the EU–UK Trade and Cooperation Agreement.

In 2018, the British government aggreed that UK–EU treaties made after Brexit would not automatically apply to Gibraltar. In late 2020, Spain and the UK reached an agreement in principle on future arrangements for Brexit and invited the European Commission to formalise it as a treaty. The UK and Spain agreed in principle on a basis for the EU and the UK to negotiate an agreement through which Gibraltar would participate in the Schengen Area. At the time of writing, no firm solution has been reached. Spain insists that their National Police controls entry to Schengen. The UK is asking for the border to instead be controlled by officers of the European Union agency Frontex. (In the rest of the Schengen area, entry points are controlled by the respective national authorities, sometimes with help from Frontex.)

Cyprus border consequences

The Sovereign Base Areas of Akrotiri and Dhekelia (SBA is a British Overseas Territory on the island of Cyprus. The areas are used for British military bases and are important for signals intelligence, especially surveillance-gathering regarding the Mediterranean and the Middle East.

Brexit prepration talks between the UK and the Republic of Cyprus started in October 2017.

The Brexit withdrawal agreement has a protocol on the SBAs, with provisions essentially maintaining their previous status.

Under Article 2(1) of the Protocol, the SBAs are now, since Brexit, partially part of the European Union Customs Union in three domains: VAT, agriculture and fisheries.

Conclusion

The effects of Brexit are extensive and complex, touching many aspects of British life. While the long-term impacts are yet to be fully realized and understood, it is evident that Brexit will continue to influence the economic, political, cultural, and social landscape of the UK for years to come. As the nation navigates its post-Brexit journey, it will need to grapple with these changes and adapt to its new reality outside the European Union.