The changes in the UK related to the advent of Brexit until now can be summarised in four main points: Exit from the Single Market, Financial mechanisms, Trade transactions, New sustainable entity.
Before Brexit UK was a member of the European Economic Area and of the Single Market which guarantees the free movement of people, services, goods, and capital within the EU member states.
It took part in the education programs being deeply committed to cooperating in Europe. Europe has funded more than 11% of research in the UK and UK’s higher education institutions have assisted the high participation of European academics and EU students in the Erasmus exchange program.
UK was subject to EU rules and its institutions like the European Court of Justice. It had a European arrest warrant and was a full-fledged member of Europol and Euro just.
Today being out of the single market, the government can fulfill its intention as suggested by the Home Office paper. It can materially reduce the number of migrants coming into the UK to perform routine roles while maintaining the capability to attract the best people able to study and work through several Visas. The visa gives immigration status enabling people to remain more than 90 days while requesting the interested individual to pay an immigration health surcharge covering the costs of any medical treatment. The Commonly used visas are Visitor Visas which are used temporarily, Student Visa for long-term study, Skilled Work Visa for long-term employment, Frontier Worker Visa, and T5 temporary work Visa for short-term employment time. In the academic field, the UK has introduced the New Global Talent Visa to continue to attract high-quality academic and research talents from Europe. It has reintroduced an internationally competitive post-study work visa that provides overseas graduates time to build a career. In addition, this is not a unique change in this field, the exit from the European Union has meant the growth of the EEA staff proportion between 5% – 7% and the decrease of RoW proportion from 13% to 9%. This is because Uk withdrew from the non-profit program of the European Union Erasmus with a subsequent great reduction of Erasmus students in its universities. Despite this loss, the UK is still involved in Horizon Research Program on a third-party basis. It takes part in the Copernicus Earth Observation Space Program and European Atomic Energy Community.
Before Brexit, the UK’s financial services which are strategically important for its economy contributed to 6.9% of the total economic output and 3.1% of jobs. They generated a healthy revenue stream for the Exchequer enjoying a prominent position for London and had benefited from the European Regional Development Fund. The European Regional Development Fund is the main source of EU development aid financed by the EU countries and managed outside the framework of the EU’s general budget that helped especially the poorer regions of the UK. About London instead, being within the EU single market for financial services, UK was able to allow financial firms registered to access the Single Market without the need to obtain additional regulatory clearance and licenses. In EU member states, London was selected as the location of choice by financial firms and served as the main gateway to access the EU market. The banks with passporting rights were able to provide services such as deposit-taking, lending, payment, and investment services across the European Economic Area(EEA) without requiring separate authorization in the other EEA member states in which it operates.
Today, the financial companies have significantly left London for other EU financial centers. This has diminished the UK‘s trade surplus in financial services and reduced the UK’s influence in financial regulation changing also the functioning of investments. All collective investment undertakings registered or authorized in the United Kingdom are non-EU alternative investment funds. They are subject to the requirements of non-performing assets (NPPRs) and in the Member States concerned where available. According to Section C(6) of Annex, I of Markets in Financial Instruments Directive (MiFID II) that makes European markets more transparent and encourages investor confidence UK-based trading venues and central counterparties (CCPs) no longer benefit from the open and non-discriminatory access to EU trading venues. Trades in shares are no longer subject to the Markets in Financial Instruments Regulation (MiFIR) that enforce numerous obligations on firms in the European Economic Area. It includes the requirement for firms to publicly disclose certain quotes, trades, and sharing trading obligations. Outsourcing of functions related to portfolio management entities of UK, that now plays the role of the third country, are only permitted where the conditions under Article 32 of the MiFID Delegated Regulation 2017/565 are met, including the requirement that cooperation arrangements between National Competent Authorities and UK competent authorities are in place. UK managers market alternative investments via a UK fund to EEA professional investors relying on national private placement regimes and complying with national requirements applicable in the Member State or delegating complying with varying local disclosure, transparency, and other regulatory obligations.
To allow cooperation and exchange of information UK Financial Conduct Authority together with European Securities, Markets Authority, and EU regulatory authorities have recently agreed to a memorandum of understanding (“MoU”) going to set out the Joint UK-EU Financial Regulatory Forum. The platform is expected to facilitate dialogue for UK and EU regulators. This will as a result grant desired cooperation in the regulation of financial services thus securing financial stability, protecting market integrity, investors, and consumers who are the core objectives of the UK and EU regulators.
Before Brexit UK had benefited from tariff rate quotas managed by the Commission’s Directorate-General. The Commission’s Directorate-General was responsible for Taxation and Customs Union on a ‘first-come-first-served basis irrespective of where the goods are imported into the EU. This also applied to goods imported and exported. It had the benefit of duty exemption under the EU Free Trade Agreement (Fta’s) in imports and exports. The subsequent quantity of product was traded at lower duty rates (in-quota duty) than the duty rate normally available for that product. EU share of the apportioned quota was computed by subtracting the UK share of a given quota. It was worked out by determining the UK’s usage share (expressed in percentage), from the entire scheduled tariff rate quota in question. The UK had benefited from the exchange of pieces of information regarding products in the e-commerce area being member, under the Consumer Protection Cooperation Regulation (2017/2394), of a cooperative framework of national authorities from all countries in the European Economic Area. It also enjoyed access to the EU policing, other security databases, essential to fight cybercrime, and ODR dashboard. ODR dashboard is a digital platform that allows EU traders and consumers to resolve disputes relating to online purchases.
Today for trade transactions with Great Britain, it is necessary to comply with VAT rules and procedures. In the E-Commerce sector with the exit from the Customs Union eCommerce, the goods sold across UK and EU border are subject to customs duties and taxes depending on the value of the shipment being sent. Taxes are in addition charged on WTO categories; they are generally imposed when purchases exceed £ 135 (approximately € 150). From the expiration of the country original principal ISS providers of the UK may now be subject to licensing requirements and should ensure that they have processes in place to monitor ongoing compliance if other EEA countries change their requirements. To export the UK has to hold an EORI code ((Economic Operator Registration and Identification).
In the long run, the UK economy is expected to incur a loss of GDP bigger than 3%. This will mean an increase in poverty and a heavy breakdown of mental health conditions. This will also have an impact on demand for the NHS, the very reason why England is investing in ongoing structural NHS reform under the NHS Long Term Plan.
Finally, before joining Brexit, UK has collaborated in the Eu emissions trading system with a portion of the carbon pricing regime. It has been a member of the EU emissions trading system (EU ETS), the cornerstone of the EU’s policy to combat climate change. This played as its key tool for reducing greenhouse gas emissions cost-effectively.
Today apart from the fact that Uk has created its own carbon emission trading scheme, its Government is also considering how to maintain growth in renewable deployment while ensuring overall system costs for electricity consumers minimized and innovative technologies and business models supported. To achieve this objective is investing, through strategic dialogue between government, consumers, and industry in new technologies from which the consumer can benefit (e.g. smart metering enabling time-of-use tariffs, smart charging, and vehicle-to-grid), whilst addressing concerns about the competitiveness of retail energy markets and energy poverty.
Like any other country, the Uk is developing its history over time. The real effects of Brexit will unfold over time with the consequent effects on the global dimension. To better understand this phenomenon it is advisable to keep up-to-date with an interdisciplinary eye since the phenomena are interdependent.
For more informations
“Live as if you were to die tomorrow. Learn as if you were to live forever.”