Aftermath of Brexit

Possible option for a post-Brexit United Kingdom

Although England (except London) and Wales voted to leave the EU, Scotland, Northern Ireland, London and Gibraltar voted to remain. In order for Brexit to satisfy each regional electorate's democratic wishes and to minimise disruption to trade in goods and services, the following could happen:

Key points are:

Motives for referendum result

Each voter who voted to leave the EU did so mostly for a single reason, while ignoring the bigger picture. Those single reasons mostly comprised immigration as well as ideological reasons such as sovereignty, democracy and the cost of EU membership.

Those who blame the EU for immigration into the UK are thoroughly misinformed. When 10 new EU countries joined the EU on 1st May 2004, EU rules allowed the UK to exclude workers from these countries for 7 years, but Tony Blair's Labour government, elected in June 2001, decided to open the floodgates immediately, unlike most other existing EU member states which exercised their right to impose a 7-year exclusion period. The electorate re-elected Tony Blair's Labour government a year later in May 2005, endorsing the decision. In contrast Tony Blair's Labour government did exercise its right in 2007 to exclude workers from two new EU members, Romania and Bulgaria, for 7 years, and when the 7-year exclusion period expired in 2014, there was no sudden influx of workers from these two countries. If Tony Blair's Labour government had not voluntarily allowed 8 Eastern European countries' citizens to work in the UK between May 2004 and May 2011, then would now be substantially fewer Eastern European immigrants working in the UK. Therefore immigration cannot be blamed on the EU but on the electorate, which endorsed the Labour government's decision at the time.

Immigration has not harmed the UK economy, but in fact has improved it significantly. However, many voters preferred to exclude further immigration at the expense of the cost to the economy of excluding those immigrants. Xenophobia superseded economic prosperity. The xenophobia-fueled anti-immigration sentiment in the electorate was evident in hate crime against Polish citizens and interests in the UK following the referendum. The referendum result was motivated by the same factors that influenced the German federal election of 6th November 1932, in which Adolf Hitler's Nazi party received the largest share of the vote with an 81% turnout. Many leave campaigners argue that the result of the referendum on 23rd June 2016 must be respected on the basis that it was democratic and had a 72% turnout. Both 6th November 1932 and 23rd June 2016 were free and democratic votes, yet both their outcomes were motivated by xenophobia and perverted nationalism. Therefore both votes' outcomes merit the same level of respect - or lack of it.

Many voters, for example those on Teeside, voted to leave the EU because of immigration from outside the European Union and European Economic Area, even though this had nothing to do with EU membership. It was a general protest about immigration levels.

Of those who voted for Brexit, few even knew what Schengen is. They believed Nigel Farage's rhetoric that the UK needs to take control of its borders. These voters failed to understand that, being outside Schengen, the UK already has control of its borders and, given that the UK already voluntarily allows 56 nationalities to cross its borders visa-free, it follows that the UK would similarly allow all EU nationalities visa-free entry if it was not already in the EU. The Leave campaign confused control of borders (Schengen, Common Travel Area etc) with the right to work (known as "freedom of movement"). The two are totally separate, and only the right to work ("freedom of movement") is connected to tariff-free access to the EU's single market.

Other issues

Some British people believe that ending "freedom of movement" will end visa-free entry to the UK by nationals of many EU countries, particularly those in Eastern Europe. This is not going to happen for several reasons:

  1. "Freedom of movement" is not simply about free movement across borders. In any case, the UK already imposes border controls as it is outside the borderless Schengen area. "Freedom of movement" refers more to the free movement of labour, i.e. the right to work in countries, which is separate from the right to enter countries.
  2. As a non-member of the Schengen area, the UK already determines which non-EEA nationalities can enter the UK visa-free. Given that UK already voluntarily allows visa-free visits by for example Argentineans, Botswanans, Brazilians, Guatemalans, Malaysians, Mexicans, Nicaraguans and South Koreans (but not the right to work), the UK has no motivation to impose a visa requirement on for example Bulgarians, Romanians or Poles. To do so would unnecessarily impede tourism and trade.
  3. In March 2017, the EU voted to impose a visa requirement on US citizens because the United States had continued to deny visa-free entry to Poles, Bulgarians, Romanians and Cypriots. If the UK imposes a visa requirement on any EU nationality, then the EU would likewise reciprocate by imposing a visa requirement on British citizens.

Following is the former content of this page until 23rd June 2016:


UK EU Membership Referendum

Last updated 22nd June 2016

In campaigning for the Brexit referendum on 23rd June 2016, both sides, but particularly the Leave campaign, have focussed on high-level subjective arguments and have overlooked the tangible implications for individuals and business.

Membership of the EEA
The referendum's second voting response "Leave the European Union" is unclear. It does not define the more fundamental question as to whether the United Kingdom should remain in or leave the European Economic Area (EEA). Therefore voters cannot make an informed decision; they don't know what they're voting for. An additional referendum would arguably be needed to leave the EEA as well, although many campaigners on both sides suggest that this is not the case, hence the ambiguity. Membership of the EU and EEA is separate, evidenced by Croatia's joining of the EU but delayed joining of the EEA.

Legislation
If the UK leaves the EU but remains in the EEA (like Norway, Iceland and Liechtenstein), then the UK would no longer have a say in the EU's trading rules but would be forced to adopt them in order to have access to the single market as an EEA member. Most EU legislation applies equally to EEA countries (except for agriculture and fisheries), so leaving the EU without leaving the EEA would do very little to lessen the effect of EU legislation upon the UK. If the UK leaves the EEA as well as the EU, then it would lose the many benefits of EU legislation that individual people enjoy. British citizens would lose the automatic right to work in any EU country. UK residents would no longer benefit from a huge amount of EU consumer protection legislation, for example compensation from airlines for cancellations and delays as well as the forthcoming ban on EEA mobile roaming charges. The Leave campaign argues that the UK could unilaterally retain retail roaming price caps after leaving the EU, but this is false because the EU would cease to regulate the wholesale prices charged by EEA networks for visitors from the UK, upon which the retail price caps depend. A lot of EU consumer legislation is useful and beneficial, as it applies to cross-border scenarios where unilateral national legislation would be ineffective. It was the EU that banned rip-off 0844/0870 customer service numbers and their equivalents throughout the EU, an example of consumer-friendly legislation that national governments had neglected to create themselves. The EU gives UK workers valuable protection under the Working Time Directive, which prevents employers from requiring employees to work more than 48 hours per week and gives employees the right to at least 20 days' holiday per annum. Before the Working Time Directive took effect, US employers such as Bloomberg required their UK employees to work 8am to 6pm with US-style annual leave of only 10 to 15 days per annum.

UK exports
Cross-border online shopping within the EU is not subject to tax and customs surcharges, because the EU is a single customs area and single VAT area. If the UK leaves the EU but remains in the EEA, then the UK would retain most of the customs advantages of the EU but it would no longer be part of the EU VAT area. Therefore online shoppers in the EU ordering from UK online retailers would not face customs charges, but the exported goods would be zero-rated for UK VAT, leaving the consumer to pay VAT in their home country upon receipt. Post offices and courier companies throughout the EU typically charge hefty administration fees for processing VAT charges levied on goods received from outside the EU VAT area and consumers often have to collect such packages in person. This would be a significant disincentive for EU online shoppers to continue ordering from UK online retailers, which would stifle a flourishing British industry that currently leads the way in the EU. This impediment to the free movement of retail exports cannot be solved by negotiation; even parts of the EU that are outside the EU VAT area, for example Gibraltar and the Canary Islands, already face this issue, although the impact upon them is small because they mostly export services. The same disincentives already apply when EU shoppers buy from US online retailers, but US-to-EU retailing is negligible compared to the large scale of UK-to-EU retailing.

Immigration
Immigration from Eastern EU countries is often cited as a strong reason for leaving the EU, yet 63% of foreign-born UK residents were born outside the EU. Of the top 10 originating countries of foreign-born UK residents, 7 are non-EU (India, Pakistan, Nigeria, Bangladesh, China, South Africa and the USA) but only one is Eastern EU (Poland). There are more Indian-born people in the UK than from any other country, of whom 45% arrived since 2000. Therefore leaving the EU and/or EEA would do nothing to stem the largest inflow of immigrants. In fact, Nigel Farage advocated even more immigration from the Commonwealth instead of from Eastern Europe on BBC1's Andrew Marr Show on 21st February 2016. If the UK leaves the EU but remains in the EEA, there would be no change to freedom of movement into the UK by EU/EEA workers. If the UK wants full access to the EU's single market without being an EU or EEA member, then the UK would have to allow freedom of movement into the UK by EU and EEA workers, as Switzerland does. The majority of members of parliament who support remaining in the EU are planning to use their parliamentary majority to vote to keep the UK in the single market if the UK votes to leave the EU, resulting in no change to access to the UK labour market by EU citizens. Leaving the EU and EEA would devalue British nationality by removing a fundamental and frequently-used right of British citizens to work throughout 29 other EEA countries.

Turkey
The Leave campaign says on its page in the voting guide published by the Electoral Commission "Five more countries are in the process of joining, including Turkey. When they join, they will have the same rights as other members". These are outright lies in order to attract votes. The truth is that Turkey is not in the process of joining. Although Turkey has expressed a wish to join since 1987, several existing EU members, such as France and Germany, have already said that they would veto Turkey joining after holding national referendums on the issue; their electorates strongly oppose Turkey joining. The UK similarly has a veto against any new member joining, but the UK would lose this veto if it leaves the EU, while still having to allow entry to EU citizens as a condition of access to the single market. Contrary to the second lie, new countries do not have the same rights as existing members upon joining. For example, when Romania, Bulgaria and Croatia joined, their citizens had no right to be employed in existing EU member states for the first seven years. Once the seven years had expired, there was no sudden influx of immigrants from these countries into the UK.

Existing expatriates and travellers
Some Leave campaigners claim that by leaving the EU, the UK would be able to expel existing EU citizens living in the UK and reclaim jobs for British people. Equally some Remain campaigners argue that British citizens living in other EU countries could be expelled from those countries if the UK leaves the EU. Neither is true. Article 70(1)(b) of the Vienna Convention on the Law of Treaties 1969 states that the termination of a treaty "does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination". Therefore any existing expatriates within the EU would be able to continue exercising their rights to live and work in their country of residence in the event of the UK leaving the EU and/or EEA. However, British pensioners living in EU countries could find themselves suddenly having to pay for health insurance (at great cost due to their age) because their free European Health Insurance Card (EHIC), funded by their previous National Insurance contributions, would become invalid. UK residents would likewise no longer be entitled to an EHIC, leaving them to pay for healthcare or health insurance when visiting EU countries for tourism or business. The Remain campaign's suggestion that non-EU British citizens would be required to obtain visas to visit the EU lacks any basis. More than 50 non-EU/EEA nationalities can already travel without visas to most EU countries (the Schengen area), for example Serbians, Albanians, US citizens, Brazilians, Japanese, Emiratis, Colombians and Malaysians. There is no reason that the Schengen area would impose visa requirements on British citizens.

Financial services
London has become the world's financial capital. Banks that are authorised to operate in the UK are automatically authorised to operate throughout the EEA through "passporting" rights. Therefore if the UK leaves the EEA, London would become a much less attractive location for non-EEA banks to have their European base. At the time that HSBC recently decided to remain headquartered in the UK, it also said that if the UK leaves the EU, then it would move 1,000 of its total 5,000 London-based investment banking jobs to Paris. Similarly Goldman Sachs said that it would move a third of its 6,000 London-based jobs to Frankfurt. If the UK also leaves the EEA, then any non-British EU/EEA citizens amongst these 3,000 employees would be able to go to Paris or Frankfurt and to keep their jobs, but British citizens would not as they would no longer be EU/EEA citizens with an automatic right to work in France or Germany. The considerable number of other banks in London would inevitably follow suit to an even greater extent, and tens of thousands of highly-paid jobs in London would be lost. The UK won a case in the European Court of Justice giving the City of London the right, as part of the EU, to clear euro-denominated assets, but this right would be lost if the UK leaves the EU, resulting in thousands more job losses. Spending by these highly-paid workers funds many other jobs in London, so there would also be an enormous impact on non-banking jobs. It would be a disaster for the economy of London. Similar moves would be made by foreign companies throughout the UK, not least by foreign-owned car manufacturers. A vote to leave the EU and/or EEA would be misguided madness, resulting in economic misery.

Sovereignty and borders
When Spain joined the EU, it had to reopen its border with Gibraltar because Gibraltar was already part of the EU. In the event of the UK's exit from the EU, Gibraltar would cease to be part of the EU, so Spain could completely close the border again in order to pressure a change in sovereignty. Furthermore the EU would require the Republic of Ireland to re-implement customs controls on its currently invisible open border with Northern Ireland, which would impede cross-border trade. In response, Liam Fox argued on behalf of the Leave campaign during a BBC1 debate on 26th May 2016 that the Common Travel Area (comprising the UK, Ireland, Channel Islands and the Isle of Man) would continue to operate, but this has nothing to do with customs controls. The Common Travel Area only eliminates immigration controls on people, not customs controls on goods, for example goods imported to and exported from the non-EU Channel Islands which are subject to customs controls. Even worse, because Scotland overwhelmingly prefers to remain in the EU, a vote by the UK to leave the EU would almost certainly trigger another Scottish independence referendum with a likely majority voting for independence and continued EU membership. The EU would require an EU Scotland to implement customs controls on its external EU border with non-EU England. Given that Wales, like Scotland, is a significant beneficiary of EU funding, Wales might follow suit. A vote by the UK to leave the EU would not result in greater sovereignty for the UK but a breakup of the UK.

European Convention on Human Rights
Some Leave campaigners argue that leaving the EU would cause the UK to be no longer bound by decisions of the European Court of Human Rights. This is false. All 47 member states of the Council of Europe, including Russia and Azerbaijan, are bound by the European Convention on Human Rights. This has nothing to do with the European Union.

National security
The Remain and Leave campaigns both argue that the UK's national security would be stronger either inside or outside the EU. They are both wrong. The truth is that national security has almost nothing to do with the EU. The international alliance for the UK's national security is NATO, and the UK already shares more intelligence with the US than with EU countries. The only significant security disadvantage of leaving the EU would be the loss of access to the European Arrest Warrant, which was most famously used in 2005 to arrest a terrorist who had fled via France to Rome after planting explosives at Shepherd's Bush tube station.

Conclusion
Few people on either side of the debate dispute that the EU needs to be reformed, but the UK is already outside the most troublesome parts of the EU - the Schengen borderless travel area and the Eurozone. The advantages of leaving the EU are outweighed by the benefits of membership. If the UK remains in the EU, it will have a significant influence on reforming the EU and will benefit from those reforms. Running away from the problems of the EU rather than confronting them and fixing them is an un-British defeatist approach. A vote to leave the EU would be a self-defeating emotional protest vote against the many deficiencies of the EU. It would be a vote for national vanity, but not a vote in national interests.