Brexit: To be or not to be that’s the Question: Way Ahead
Nothing has divided the British society in the last one century or more than Brexit, or Britain’s Exit from the European Union, with the Tories, the Labour, the Liberals and the people both swinging from one end of a resolute Yes to a scared No at different times. It was said about the times before second world war that sun never set in the British empire and Great Britain was everywhere. Now the same Britain or UK contemplates going into its own shell, to disengage.
A referendum was held on Thursday 23 June, 2016, to decide whether the UK should leave or remain in the European Union. Leave won by 51.9% to 48.1%. The referendum turnout was 71.8%, with more than 30 million people voting. England voted for Brexit, by 53.4% to 46.6%. Wales also voted for Brexit, with Leave getting 52.5% of the vote and Remain 47.5%. Scotland and Northern Ireland both backed staying in the EU. Scotland backed Remain by 62% to 38%, while 55.8% in Northern Ireland voted Remain and 44.2% Leave.
The European Union (EU) is an economic and political partnership involving 28 European countries. It began after World War Two to foster economic co-operation, with the idea that countries which trade together were more likely to avoid going to war with each other. It has since grown to become a “single market” allowing goods and people to move around, basically as if the member states were one country. It has its own currency, the euro, which is used by 19 of the member countries, its own parliament and it now sets rules in a wide range of areas – including on the environment, transport, consumer rights and even things such as mobile phone charges.
The UK had been due to leave on 29 March 2019, two years after it started the exit process by invoking Article 50 of the EU’s Lisbon Treaty. But the withdrawal agreement reached between the EU and UK has been rejected three times by UK MPs. Having granted an initial extension of the Article 50 process until 12 April 2019, EU leaders have now backed a six-month extension until 31 October 2019. If the UK and EU ratify the withdrawal agreement before then, the UK will leave on the first day of the following month.
But public opinion is sharply divided on this. Stopping Brexit would require a change in the law in the UK, something neither the government nor the main UK opposition parties want to do at this point. The European Court of Justice ruled on 10 December 2018 that the UK could cancel the Article 50 Brexit process without the permission of the other 27 EU members, and remain a member of the EU on its existing terms, provided the decision followed a “democratic process”, in other words, if Parliament voted for it. In March, an online petition calling for Article 50 to be revoked gained over six million signatures.
The EU has said the Brexit process should not be extended again beyond 31 October 2019, but legally speaking another extension could happen if all EU countries, including UK, agree to it.
If Labour and the Conservatives fail to reach an agreement, MPs will face a series of votes on Brexit options, which could include another referendum. The conflict is on a deal between UK and EU. The main point of having a deal between UK and EU is to ensure as smooth as possible an exit from EU for businesses and individuals – and to allow time for the two sides to hammer out a permanent trading relationship.
After months of negotiation, the UK and EU agreed a Brexit deal. It comes in two parts. A 585-page withdrawal agreement is a legally-binding text that sets the terms of the UK’s divorce from the EU. It covers how much money the UK owes the EU – an estimated £39bn – and what happens to UK citizens living elsewhere in the EU and EU citizens living in the UK. Additionally, a 26-page statement on future relations has been reached which is not legally-binding and sketches out the kind of long-term relationship the UK and EU want to have in a range of areas, including trade, defence and security.
There is a Transition Period also, which is part of the withdrawal agreement, which so far, has not been approved by MPs. It refers to a period of time after Brexit until 31 December, 2020 (or possibly later), to get everything in place and allow businesses and others to prepare for the moment when the new post-Brexit rules between the UK and the EU begin. Free movement would continue during the transition period, as the EU wanted. The UK would be able to strike its own trade deals – although they wouldn’t be able to come into force until 1 January 2021. But it all rests on the withdrawal deal being ratified.
UK can leave without a deal too. This is the so-called no-deal Brexit. In that case, UK would sever all ties with EU with immediate effect, with no transition period and no guarantees on citizens’ rights of residence. The government fears this would cause significant disruption to businesses in the short-term, with lengthy tailbacks of lorries at the channel ports, as drivers face new checks on their cargos. Government ministers and multinational companies with factories in the UK have also warned about the long-term impact on the British economy. Brexit-supporting MPs claim it would not be as bad as they say and the UK would save on the £39bn divorce bill, as well as being free to strike its own beneficial trade deals around the world.
The World Trade Organization sets rules for countries that don’t have free trade deals with each other, including tariffs – the taxes charged on the import of goods. Without an agreement on trade, the UK would trade with the EU under World Trade Organization rules.
When the UK leaves the EU, the 310-mile border between Ireland and Northern Ireland will become the land border between the UK and the European Union. Neither side wants to see a return to checkpoints, towers, customs posts or surveillance cameras at the border, in case it reignites the troubles and disrupts the free cross-border flow of trade and people. But they can’t agree on a way to do that.
PM Theresa May was against Brexit during the referendum campaign but is now in favour of it because she says it is what the British people want. She triggered the two year process of leaving the EU on 29 March, 2017. She has been in a precarious position because she lost her House of Commons majority in the 2017 general election. She has survived two attempts to remove her from office so far. She survived by 200 votes to 117. She is now immune from another attempt to oust her as Tory leader until December 2019. However, Mrs May herself has told Tory MPs she will resign, if MPs back her deal, so someone else can lead the next phase of Brexit negotiations, so her time in the top job is limited.
Labour says it accepts the referendum result and that Brexit is going to happen. But it opposes Theresa May’s Brexit plan, and wants to stop it and force a general election. In February, it said it was prepared to back another referendum to prevent a “damaging Tory Brexit”, after failing to win a vote of no-confidence against the government. The party leadership has resisted the idea of supporting another referendum in all circumstances – as supported by deputy leader Tom Watson and a number of its MPs. Labour leader Jeremy Corbyn says he would negotiate a permanent customs union with EU after Brexit, which would be very similar to the one it has now. This is the only way to keep trade flowing freely and protect jobs, he says, as well as ensuring there is no return to a “hard border” in Northern Ireland. He says UK should have a very close relationship with the single market. Labour accepts that some form of free movement of people might have to continue.
On citizens, an agreement between the UK and the EU provides what Theresa May says is certainty to the 3.2 million EU citizens in the UK – as well as citizens of Iceland, Liechtenstein, Norway and Switzerland that they will be able to carry on living and working in the UK as they have done with their rights enshrined in UK law and enforced by British courts. UK citizens in the EU will also retain their current rights with what the EU’s Jean-Claude Juncker called a cheap and simple administration procedure. Under the plan EU citizens legally resident in the UK and UK citizens in the EU will be able to leave for up to five years before losing the rights they will have as part of the proposed Brexit deal.
Any EU citizen already living and working in the UK will be able to carry on working and living in the UK after Brexit. The current plan is that even after Brexit, people from the EU will be able to move to work in the UK during a “transition” phase of about two years. What exactly happens after the transition period has yet to be decided, but the proposal is for a work permit system along the lines of that for non-EU nationals. PM May said one of the main messages she took from the Leave vote was that the British people wanted to see a reduction in immigration. Free movement of people from the EU will effectively continue until the end of the transition period in December 2020. After that, people from the EU will need visas to work in the UK, with priority given to skilled workers – the same system that currently applies to migrants from outside the EU. However, tens of thousands of low-skilled migrants could come to the UK to work for up to a year to protect parts of the economy that rely on overseas labour. That measure would last until 2025. Under the Brexit deal, EU citizens and UK nationals will continue to be able to travel freely with a passport or identity card until the end of the transition period in December 2020. After this period ends, the European Commission has offered visa-free travel for UK nationals coming to the EU for a short stay, as long as the UK offers the same in return.
If no trade deal is in prospect by July 2020, the two sides could agree to extend the transition period instead. They could do this only once. The transition could not go on being extended indefinitely. But there is no agreement on how long any extension would be. Mrs May has said EU citizens in the UK will be able to stay even if there is no deal done on Brexit. There is uncertainty about what no deal would mean for Britons living in France, Spain, Germany and elsewhere. The priority for most will be to register as residents, but the rules – including deadlines for paperwork – vary from country to country. If the UK leaves without a deal, British citizens who travel to the EU for up to 90 days will not have to apply for a visa – as long as the UK grants reciprocal visa-free travel for all EU citizens in return. The law confirming this arrangement has been adopted by the European Parliament, and now awaits the final sign-off from EU countries. It would come into force whenever the UK leaves the EU, regardless of whether a withdrawal agreement is reached.
All existing EU laws will be copied across into UK law, to prevent legislative “black holes”, under the terms of the European Union (Withdrawal Bill). The UK government can then decide over a period of time which ones it wants to keep, change or ditch.
According to the latest figures from the Office of National Statistics, net migration to the UK from non-EU countries was 261,000 in the twelve months to September 2018 – the highest since 2004. In other words, the result of the referendum appears to have already had an impact before Brexit has actually happened.
There is much debate about the long-term costs and benefits to the UK economy of Brexit – but what we do know for certain is that the EU wants the UK to settle any outstanding bills before it leaves. The £39bn “divorce bill” will cover things like pension payments to EU officials, the cost of relocating London-based EU agencies and outstanding EU budget commitments. But the calculation of an exact UK share will depend on exchange rates, on interest rates, on the number of financial commitments that never turn into payments, and more. The UK says that if there is no deal agreed on Brexit it would pay substantially less and focus only on its “strict international legal obligations”.
The UK could leave without any Brexit “divorce bill” deal but that would probably mean everyone ending up in court battles. If compromise can be achieved, and if payment of the bill were to be spread over many years, the amounts involved may not be that significant economically.
David Cameron, his Chancellor George Osborne and many other senior figures who wanted to stay in the EU predicted an immediate economic crisis if the UK voted to leave and it is true that the pound slumped the day after the referendum – and is currently about 10% down against the dollar, and 10%-15% down against the euro. Predictions of immediate doom were wrong, with the UK economy estimated to have grown 1.8% in 2016, second only to Germany’s 1.9% among the world’s G7 leading industrialised nations. UK economy continued to grow at almost the same rate in 2017 but slowed to 1.4% in 2018, the slowest rate since 2012. In the first quarter of 2019, UK economy grew at 0.5%.
There is also a debate between Soft and Hard Brexit. At one extreme, “hard” Brexit could involve UK refusing to compromise on issues like the free movement of people even if it meant leaving the single market or having to give up hopes of aspects of free trade arrangements. At the other end of the scale, a “soft” Brexit might follow a similar path to Norway, which is a member of the single market and has to accept the free movement of people as a result of that.
No nation state has ever left the EU. But Greenland, one of Denmark’s overseas territories, held a referendum in 1982, after gaining a greater degree of self government, and voted by 52% to 48% to leave, which it duly did after a period of negotiation.
On the issue of UK’s political influence globally, views differ. View one is that UK projects power and influence in the world, working through organisations such as EU and that on our own it’ll be a much diminished force. View two is that unencumbered by the other 27 members, UK can get on with things and start adopting a much more independent, self-confident, assertive role on the world stage.
Given the complex nature of Brexit, deal or no deal, and the fact that a referendum has supported Brexit, with larger sections of the ruling and opposition parties also now falling in line, to go ahead with Brexit by October 2019 is the only right democratic way out. Alongside, a re-negotiated deal, with lower pay-out, spread over several years, and with minimum pain to citizens on both sides, is the right path ahead.