PROS AND CONS OF BREXIT

by Rashi Srivastava

Introduction

In order to understand and analyse the pros and cons of Brexit in a better way, it will be imperative to know what Brexit is. Speaking in a layman language, the word Brexit has been composed of two words ‘Britain’ and ‘exit’, thus this name Brexit was given to the departure of United Kingdom from the European Union. The European Union consists of a group of 28 countries that trade and gives a permit to their citizens to move freely between nations in order to work and live[i]. On 23^rd June, 2016, the UK held a referendum regarding its membership of the EU. This referendum was passed citing several reasons; some of them were immigration, sovereignty, and issues relating to money. Hence, 51.89% voters voted for the UK to leave EU. The UK withdrew itself from the EU on 31 January, 2020.

Main Issue

Now, the question arises that what led to the withdrawal of the United Kingdom (UK) from the European Union (EU)? The back story is that the UK had joined the European Economic Community, which is basically a regional organisation which has its objectives to bring about the economic integration among the member states. The UK had joined this community in the year 1973 and ultimately went on to become a part of the European Union when it was created in the year 1993. Nonetheless, the UK had always tried to maintain a distance from the EU. The reason was that it has its own currency which is the pound sterling and it also abstained from joining the Schengen agreement, which removes the internal border controls within the European Union. Also, the people within the realm of political fraternity were always against the idea of EU, and this hostility became much more intense after the 2008 financial crisis. There was a market crash in the year 2008 which hit the European countries hard[ii]. Thus, many people lost their jobs and in order to find a new one, they went to other countries- like the United Kingdom. This immigration from poorer EU states was not liked by many and it further escalated the cynicism among voters and politicians.

In the year 2012, the Prime Minister at that time, David Cameron had vowed to hold a referendum on whether the UK should continue to remain in the EU or leave it. Keeping his promise, the referendum was held on June 23, 2016. But soon after the results, David Cameron resigned. After his failure to convince the nation to remain in the EU led to his resignation, which eventually led to his replacement by Theresa May. Though, Theresa May’s decision in the year 2017 to hold a general election, gave the legislative power to opposition MPs as she lost the Conservative Party’s majority. It ultimately left the UK in a period of political deadlock. The MPs denied Theresa’s Brexit deal with the EU on several occasions and it led her to delay the Brexit twice.

After Theresa May’s resignation, Boris Johnson took her place and promised to deliver Brexit as soon as possible. Thus, ensuring this, he quickly pushed for a new election, in which he won by a vast majority in the Parliament. Finally in the month of January 2020, Boris Johnson was able to get his withdrawal agreement through Parliament. This resulted in the much awaited day for Britain as it officially made its departure from the European Union on 31^st January, 2021.

With the final withdrawal of the UK from the EU, there are some advantages and disadvantages that will follow the UK. Some of them are listed below.

• Pros

Talking about the rules and taxes, the UK will have more control to shape its regulatory environment and also cut taxes[iii]. There could also be an expansion of the patent box by the government. This will help in reduction of the taxes on profit from patented inventions to foster research and development. In the field of emerging industries, UK can take a permissive approach than the EU.

Brexit would help focus on the trade for Britain. Basically, the EU is a single market which encourages imports and exports between the member states and it is exempted from tariffs and other barriers. Financial services and other services can also be offered without restrictions across the continent[iv]. Separating itself from the EU will give the country a chance to negotiate its own trade partnerships rather than being dependent on the multinational governing body.

Having withdrawn from the European Union, there would be establishment of sovereignty of Britain. Being part of the European Union, Britain was required to give up its unique identity. It was pressurized to give up some of the control over their domestic matters in order to maintain its positive membership status.

Creation of possibility of new jobs. There is an estimate that around 3 million jobs in Britain are associated with trade policies, activities, procedures right now[v]. Though, having left the European Union does create a danger where the employment jobs could be lost. But if there is an increase in the trade, then there could be a growth in the employment sector.

Improvement of Border Security. There is a spike in terrorism in Europe and it is a risk for the Britain domestically as it allows free movements. But because of the Brexit structure, the country now could close their open borders in order to check the visitors and also to control the free movement of the people.

Brexit would also help reduce immigration. When Britain was a part of EU, then it could not prevent or stop a citizen of another member state from coming to reside in the UK. Same was with the Britain, it could live and work anywhere else. But because of the immigration law, there was a huge increase in immigration into Britain. Thus, because of the separation now, Britain is free to maintain the pace of immigration that will be in the best interest for their nation.

• Cons

Separating from the European Union, there will be impact on the trade of Britain. It is well understood that the UK would lose the enjoyments of free trade with neighbors and also reduce its negotiating power with the rest of the world[vi]. Also, there were no trade barriers while trading with other EU member states. Britain would lose its influence and will suffer, both economically and politically.

There would be elimination of protections of equal pay, maternity leave, as well as safe workplaces. The EU has spent it’s enough time upon bringing the country along, while offering equality advantages to the women and those belonging to the minority category. Now, the UK being separated, there would not be the same protections against discrimination as there were earlier. Further, there used to be four weeks of guaranteed annual leave for the employees, four months of paid parental leave, also including the additional protections for the workers who are pregnant. All of these benefits will be reversed now, being the fact that Britain will make laws itself.

Labor shortage could be created. Though, there will be a drop in the immigration levels, which will lead to more job availability for everyone residing in the country, but this can create labor shortage too. With the drop in the immigration rates, there will be a drop in the population levels too. The decline in population levels would also reduce the demand for goods and services, thus leading to skill shortages.

Bond markets of Government are likely to be affected too[vii]. This move will cause the government to re-evaluate the status of UK government securities. This would result in an increase in the cost of borrowing for the government of UK.

There could be reversal of protections of food, health, and animal rights. This would happen because most of the food standards which were in place in Britain, originated from the European Union. Now that both are separated, then many harmful additives which are in food products will no longer be checked by the EU for the citizens of Britain. Animal testing was also banned by the EU across the entire membership bloc in the year 2012.

Suggestions and Conclusions

From the above, it can be concluded that as per the pros and cons, it can be observed that how complex and uncertain the situations can be between both the UK and the EU. Britain might have opted out from the membership of EU citing reasons like its own identity and sovereignty, etc., but on the other hand, it has and it will create a lot of chaos in the political, social, economical sectors for a long time to come. It will take much of the time for the UK to be back on track and on a normal route.

---

[i] https://www.business-standard.com/

[ii] https://www.vox.com/2016/6/24/12025514

[iii]https://www.businesslive.co.za/bd/world/europe/2020-10-29-yes-there-are-some-benefits-to-brexit/

[iv] https://www.theweek.co.uk/brexit-0

[v] https://vittana.org/22-pros-and-cons-of-brexit

[vi]https://www.instituteforgovernment.org.uk/sites/default/files/publications/2018%20IfG%20%20Brexit%20impact%20%5Bfinal%20for%20web%5D.pdf

[vii] https://www.cambridge.org/core/journals/national-institute-economic-review/article/shortterm-economic-impact-of-leaving-the-eu/FAE6E92CF43B8D895343967AE5E566A3

[viii] Picture: BSFI Elts Technomedia

Advertisement