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Brexit: What Happens Next?

On Friday 31st of January 2020 at 11pm the UK left the EU.

To start with you will notice very little has changed.

The UK no longer has MEPs in the European Parliament so will no longer be part of any decision making process either there or elsewhere in the EU. All decisions made by the EU will be done by the 27 states who are members.

For just under a year the UK will exist in a ‘Transition Zone’. This is a sort of no man’s land where the UK will still have to obey EU regulations but will have no say over them. This is the time the UK Government has set aside for making trade deals.  After this time if agreement cannot be made the UK will be in a no deal scenario.

The UK will also be required to continue with its financial obligations to the EU.

The money side of things will take several decades to be paid. The UK all this year will continue to pay into the EU as if it was still a member. All those projects currently funded by the EU in the UK will continue to receive payments.

After March 31st 2021, payments to the EU will be passed by the UK Parliament every year. This is a legal requirement. Payments to the EU by the UK are expected to continue until 2060. It is estimated by the UK that they will amount to £30billion.

During the transition period is when trade deals can be negotiated but the UK will have to have its regulations compatible with those of the EU if it wants to get a deal. It took 7 years for Canada to reach a trade deal with the EU. Archived story: EU Ready to Sign Huge Trade Deal with Canada

Much of the food we buy today is imported – a quick look around the supermarket shelves is proof of that. 70% of it comes from the EU. The UK also exports to the EU  and in 2018 it was worth £22 billion. All this was fairly straightforward to do because our standards were in line with the EU and there were no tariffs imposed – either way – free and frictionless trade.

That will change after next year. The UK will be what is known as a ‘Third State’ and currently the EU places tariffs on imports of food, drink and feed. The UK will also have to apply tariffs on products coming in from the EU as that is a condition of World Trade Organisation rules. The  way round this would be to have a free trade agreement with the EU (basically what we had as members) or to similarly allow free entry to all countries (with a very few exceptions). This, of course, would mean cheap food being imported and a serious threat to our own farmers.

financial services

The UK is a top trader in services which account for 46% of its exports. As with food, services are products- financial services making up by far the largest of these and with the EU the biggest market for them. It affects everything from setting up a new business, to the sharing of data. It relies on having the same regulatory alignment.

Leaving the EU will change how UK service businesses like law firms, banks, insurers, architects and tour operators trade with the EU. Whatever choice the UK makes, departing from Single Market rules will inevitably mean more barriers to trade. As the Confederation of British Industry has stressed, “an agreement of unprecedented depth” would be required to ensure trade between the UK and the EU remains as frictionless as possible. UK Parliament Research Paper

The most immediate effects of the run up to Brexit have been on people – those who have come to live here and those who have gone to live in EU countries. EU citizens in the UK are required by the Government to apply to live  here. This scheme is called ‘Settlement Status’ and applies to the 27 EU states, the EEA (European Economic Area) and Switzerland. The system has been beset with problems – some due to IT difficulties and people being refused and having to appeal despite having lived in the UK for over 5 years. At the moment the deadline for applying is set at 31st of December 2020. It does not apply to people from Ireland.

It is estimated that only 60% of those who are required to apply by the UK Government’s immigration laws have done so. If there is no deal agreed the status of EU citizens living in the UK will be very vulnerable. Many of them have married UK citizens and have families. They have worked here contributing to the UK economy and society.

The UK Government’s Withdrawal Act removed “ the Government’s existing obligations (under section 17 of the EUWA) with regard to unaccompanied children seeking asylum in the EU who have family members in the UK.” These are extremely vulnerable children fleeing persecution and conflict.

If you are travelling to the EU you will still be able to use your existing passport, however, any one getting a  new one ( produced by a French/Dutch company) will have noticed that they no longer have the words ‘European Union’ on them. The colour will also be changing from the current burgundy to blue. During the Transition period this year travellers should notice no change, however, if there is no deal reached then UK passport holders will be subject to passport controls and delays. All this also applies if you are travelling with a pet, as many people do. If you intend taking a pet on holiday with you to an EU country it is advisable to get the necessary veterinary paperwork done well in advance of any planned trip. 

For the many UK citizens who live in the EU the Transition period will see nothing much changed for them, however, if they wish to remain in those countries they will have to apply for residency by 30 June 2021. The European Health Card (EHIC) will be valid for the transition period. UK Citizens living in EU countries will continue to receive their benefits if they are already in receipt of them.

For such a complicated set of legislation to untwine, the period set aside for Transition is quite short.  After this period the effects of Brexit will be noticeable.

Also included in the UK Governments Withdrawal Act were new extensive powers for UK Government Ministers. Reforms to Agriculture and Fisheries which were put on hold due to Brexit taking up so much parliamentary time will now be put back on track. These two sectors of our economy, extremely important for Scotland, will change. The management of both agriculture and fisheries is devolved to the Scottish Government, however, the UK Parliament will be passing the reforms and the devolved administrations will be required to comply with them.

Brexit may have taken place on 31st of January but the processes involved have only begun and there is still huge uncertainty of what is actually going to happen next.

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Reporter: Fiona Grahame

Categories: News, Views

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