Brexit: A Calamity for The United Kingdom

Withdrawal Deadline Fast Approaches, But Still No Deal In Sight

By Suresh Hanubal

News Editor

On 23rd June 2016, the voters of the United Kingdom voted for “Brexit”, or a plan to leave the European Union, by a 52 – 48 percent margin. The lead up to this vote was marred by allegations of Russian Interference and Accusations of lying on part of the Leave side. In the vote’s immediate aftermath the British Pounds exchange value plunged to thirty-one-year lows and Prime Minister David Cameron found himself out of a job. In the subsequent Conservative (Tory) party leadership election, he was replaced by Theresa May. She remains in power today, as does the United Kingdom in the European Union.

Although those two factors may have remained the same throughout this period, the United Kingdom has faced a number of economic challenges and changes over the past two and a half years. The British Pound has continued its steep decline in value; with it now being more than 20% lower than its Pre-Brexit peak. In addition, the economy has stagnated since the vote in anticipation of the effects of Brexit on the United Kingdom. In the three years preceding the vote economic growth averaged 2.5 percent. Yet, since the vote economic growth has been much lower, only averaging 1.6 percent. More concerning than this is the fact that economic growth has been decreasing since the vote, with it being 1.9 percent in the immediate aftermath of the Brexit vote in 2016, but have fallen to 1.4 percent by last year. Moreover, average wage growth since the vote has also seen a precipitous decline, continuing the stagnation that began to develop in the aftermath of the 2008 Financial Crisis. Today, the United Kingdom is teetering on the edge of a recession, with the reasons for this almost being solely due to markets and citizens anticipation for the negative effects of Brexit.

Politically, the preparations for Brexit has been a lengthy and complicated process, with it at times appearing as if Theresa May and her negotiating team did not know what they were doing. Although the nonbinding vote on European Union membership occurred on June 23rd, 2016, the actual process of Brexit did not fully go into motion until Prime Minister Theresa May triggered Article 50 in March 2017, nearly a year later. Article 50 of the Treaty of Lisbon (signed 2007) gives any EU member state the right to quit unilaterally and outlines the procedure for doing so. It gives the leaving country two years to negotiate an exit deal. As such, the United Kingdom had two years to come up with a comprehensive departure plan, with its date of withdrawal set for 28th March of this year.

After the invocation of Article 50, the next major political development in the United Kingdom was the 2017 General Election, which took place on 8th June 2017, or roughly a year after the initial Brexit vote. Incumbent Prime Minister Theresa May called this election in order to shore up her support in parliament for the future Brexit negotiations to come. Unfortunately for her, this is not what transpired in the election on that date. Her Conservative (Tory) Party actually ended up losing seats, and as a result, was forced into a coalition with the far-right Democratic Unionist Party (DUP) of Northern Ireland. This ended up hampering her ability to negotiate with the European Union in the succeeding months.

After this election, the next major event that had relevance as to the Brexit process was the parliamentary approval of the Withdrawal Act in June of 2018. Herein, the United Kingdom formally codified existing European Law into United Kingdom law and proclaimed that relevant European Laws would not apply to the United Kingdom from that day forth. From here, British and European Union representatives met in Brussels over a series of months to set out the terms of withdrawal. This draft withdrawal deal was agreed to in November of 2018. Unfortunately for Prime Minister May, the parliament of the United Kingdom did not agree to these terms, voting it down in record numbers.

This brings us to today, with Prime Minister May in an incredibly weak position, and no real deal in place for when the United Kingdom withdraws from the Union on 28th March. In addition, several Conservative and Labour party members have left their respective parties due to frustration with their parties support for Brexit. As a note, several Labour Party MP’s, specifically MP Luciana Berger, also cited rising anti-semitism both within the nation and the Labour Party. These members decided to form a moderate, pro-European Union grouping called “The Independent Group”. Due to this new grouping, and to prevent further members from defecting to it, the leader of the Labour Party, Jeremy Corbyn, decided to formally commit his party to a second referendum on European Union membership. However, despite these recent Pro-EU political moves; and although recent polls have found that a strong majority of 55% of Britons now would like to remain within the Union, Theresa May continues to refuse to budge.

If a deal is not agreed to soon, that could prove disastrous for the United Kingdom. A hard border would be imposed between Northern Ireland and Ireland, and that would almost certainly re-inflame tensions in that historically volatile region. In addition, British consumers would see immediate rises in the prices of foodstuffs and other household goods. Due to probable mass panic, a no deal could also result in food and medicine shortages across the country.

So as to avoid this scenario, the United Kingdom should take immediate action. Theresa May and her team could either attempt to renegotiate the deal, ask for a longer transition period until the United Kingdom has to leave the European Union or call Brexit off altogether. Whatever happens, this has already proven to be an incredibly interesting period of British history.

 

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