UK-EU (Brexit deal)

The UK voted to leave the EU in a referendum in 2016.

Since 2017, polls have consistently shown that more people than not think this was the wrong decision.

Yet, Boris Johnson was elected to ‘get Brexit done’ in 2019 and so the will of 13.9 million people has ensured that “Brexit day” occurred on 31st January 2020. What may be surprising is that the government has had to launch a “get ready for Brexit” campaign as of July 2020.

Key dates (2020)

31st January 2020 – “Brexit day” – the UK officially stopped being a member of the European Union but remains in ‘transition’ until 31st December 2020. All rules effectively remain the same but the UK no longer has a say on the future of the union.

30th June 2020 – Expected deadline for agreeing ‘financial equivalence.’ The two sides failed to agree this part of the deal after the UK only responded to four out of twenty-eight questionnaires presented by the EU.

30th June 2020 – Deadline for UK requesting an extension to the transition period. The UK formally rejected this idea in mid-June, despite a majority of the public believing it was better to extend transition to allow combined efforts against Covid19.

1st July 2020 – Expected date for agreement on fisheries. This deadline also passed without any agreement and, in fact, the talks fell apart because of ‘serious’ disagreements.

31st July 2020 – Date Boris Johnson had proposed for agreeing a deal. The UK Prime Minister had said in mid-June that he wanted a ‘tiger in the tank‘ of negotiations and expected a deal could be completed in July. Despite the typical Johnson imagery, this deadline also was not met.

31st October 2020Last possible deadline for a deal to be ratified by the EU, according to Michel Barnier, the EU’s chief negotiator. The French government, amongst others has said this will be very difficult to achieve and the UK negotiators have been reported as ‘close to giving up hope.

31st December 2020 – Last day of transition period, if no deal has been agreed by this stage then severe disruption and damage is expected to the economy, jobs, food security, national security, public services etc. This is expected to be made far worse because of ongoing disruption and distraction of Covid19. In fact, the army is being prepared for a ‘four-way winter crisis‘ that could be summarised as Covid19, ageing demographics (the usual winter crisis), climate crisis (mostly flooding in the UK) and Brexit.

Key benefits/opportunities

Sovereignty – the Brexit campaigners slogan was “take back control” and the myths around EU bureacratic over-reach have been so prevalent in the UK that the EU set up a mythbuster site dedicated to British tabloid nonsense. In 2017, the then Prime Minister Theresa May stated clearly, “Whilst Parliament has remained sovereign throughout our membership of the EU, it has not always felt like that.” So, one benefit of Brexit would appear to be that British tabloids would stop making people feel like they’ve lost something they haven’t.

Ending payments to the EU – Brexit campaigners, including current Prime Minister Boris Johnson, famously travelled the country with a bus claiming an over-inflated figure for the UK’s contributions to the EU budget. The claim has been made post-referendum, much to the annoyance of the UK Statistics Authority which calls is a “blatant misuse of official statistics.” Still, the UK has been paying out roughly £8-9bn NET each year to be a part of the EU. In response, various economists and government departments have pointed to the financial benefits of membership (where the UK moved from ‘sick man of Europe’ to one of the world’s biggest economies, during the period of membership) and the costs of Brexit both projected (depends on what sort of Brexit there is) and current. One economist has estimated that the cost of Brexit between 2016 and 2020 is roughly equivalent to the total contributions made by the UK to the EU budget in 47 years of membership.

Fishing – the surprise totem of the Brexit referendum was fishing. At 0.12% of the UK’s economy, there aren’t many fishing fleets around to make a loud noise but the Brexit campaign put it front and centre as an issue. Michael Gove has kept this up claiming that Britain will ‘own’ the seas. What seems most likely is that fishing fleets with with the UK’s self-identity as “Britannia rules the waves” and memories of the D-Day rescue. A benefit of Brexit is that the UK could, in theory, exclusively fish British waters and even double the size of its fishing fleet but, most catch from British waters is sold to … the EU, because Brits prefer other sorts of fish (that we often have to import from the EU.) So it seems clear that some sort of negotiations will have to be made and concessions to boot. In the meantime, we’ve had Scallop Wars at sea and the issue of fishing is derailing all other negotiations.

Farming (and the Common Agricultural Policy) – British farmers were linked to support for Brexit and leaving the bureaucratic system of subsidies and agreements has picked up broader support from environmentalists like George Monbiot. While the EU has acknowledged the need to improve its own policies, the pro-Brexit British government has yet to confirm what post-Brexit British policy will be. Recent announcements around cutting tariffs (considered a major Brexit benefit by the government) have been opposed by farmers who have ‘accused the government of betrayal.’ The recent Agriculture Bill and Trade Bill have both been met with protest from farmers because they threaten to directly undercut farm prices through cheap imports and also by undercutting standards. Therefore, the benefit of Brexit is to cut the cost of food within the UK but to do so at the expense of our farmers, food security and food standards.

Cutting tariffs – As with farming, Brexit ministers in government have proposed cutting import tariffs to zero on all sorts of goods coming from foreign countries. The government says this would reduce costs to UK consumers but the true benefit isn’t expected to be much. This small reduction in consumer pricing would come at a cost to UK producers. Make UK reports that their members are worried about increased costs of some EU imports, increased bureaucracy costs for imports and exports and that cheaper imports could push some UK manufacturers out of business altogether. There is also concern over cutting safety and quality standards too – with the UK having stated previously “what’s good enough for India” should be good enough for the UK to import.

Striking independent trade deals – This is why we’re here, of course! Pro-Brexit government ministers have spent lots of money on promoting “Global Britain” and everyone from Liam Fox, Penny Mordaunt, Michael Gove to Prince Andrew have suggested that we absolutely must have some Royal Yachts to shmooze foreign dignitaries and business persons about 3 miles offshore if we’re to get the really good deals. The UK had benefited from EU trade deals and has tried to ‘rollover’ those for after brexit. So far, it’s managed rollover deals with around 50 out of 70 countries. These aren’t improved deals though, they’re exactly the same. Many countries have said they won’t rollover the current deal, and will wait to see what deal the UK gets with the EU before they broker a new deal. Japan is one example of this – with most pundits saying that any new deal will need to have limited ambitions and certainly “won’t be better” than the EU-Japan deal. Other deals, such as the one with New Zealand are expected to be so small that they will have “zero benefit” to GDP (the New Zealand deal may actually shrink the UK’s GDP.) Thus, the UK will be free to make its own deals but the benefits of these aren’t entirely clear, and the prospect of them being better for the UK is highly disputed and, on the other hand, the UK will be erecting barriers to trade with its biggest trading partner, the EU.

Cutting bureaucracy – Of the many myths around the European Union, runaway bureaucracy has been a stalwart. A classic that actually stemmed from the US, was about how cabbage regulations ran to 29,000 pages. Some EU policies, like the Common Agricultural Policy mentioned above, have been accused of being bureaucratic and troublesome but on the other hand, there is a benefit to having a single rule book for such a large trading bloc. In reality, the UK is now having to spend £700m extra on border force staff and increased bureaucracy and £7bn of bureaucracy costs to hit British businesses (what some call an ‘existential threat‘), not to mention people wanting to go on holiday, especially with pets or where the people have health conditions etc. So, as mentioned in earlier ‘benefits’ the UK would be able to undercut the region in terms of standards for imports and maybe will cut some VAT receipts on imports but will have to face knock on consequences from those measures and will also face a whole host of increased bureaucracies from increased border checks, duplication of business regulations and all the rest. Arguably more bureaucracy, not less.

Cutting immigration

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