The Brexit Deal – Dividing a Nation


By Ayush Singh Gaur from City Law College, Lucknow


What is Brexit? The term Brexit is used as an abbreviation for the “British exit” referring to the decision of UK to leave the European Union. The EU is a financial and political association including 27 European nations. It permits unhindered commerce, which implies merchandise can move between part nations with no checks or additional charges. The EU likewise permits free development of individuals, to live and work in whichever member nation they pick. The United Kingdom joined in 1973 when the EU was known as European Economic Community and since has become the first member nation to exit the association.

The EU and the European Central Bank have battled with high sovereign debt and declining development in Portugal, Ireland, Greece, and Spain since the worldwide market breakdown of 2008. Greece and Ireland received help from the community in 2009 which was followed by help to Portugal and a second time help to Greece in 2010. Northern member countries such as Germany, United Kingdom and Netherlands grew resentful towards the financial drain from the south. As the situation moved from crisis to inactiveness of growth, UK announced that it would hold a referendum to determine if it would remain a part of the EU in June 2016. A voting was held on the referendum in which the public voted and the leave side emerged victorious with a slight majority. The British government formally announced its withdrawal in June 2016 and began the Brexit process.

Brexit was originally meant to happen in March, 2019 but it got delayed after the deal presented by then Prime Minister Mrs. May got rejected twice by the Members of parliament. After a third voting down of the deal by the MPs, Mrs. May resigned and was succeeded by Mr. Johnson. An early general election was called by Mr. Johnson which happened in December 2019 and resulted in a majority, allowing UK to leave the European Union nearly four years after the referendum first took place. The final withdrawal agreement got ratified in January 2020 by both UK and EU and it finally came into force on 31st January 2020. The UK as of now has entered an 11 month “transition period” which will last till 31st December 2020. The UK will continue to follow all of the EUs rules and its trading relationship will remain the same but it will no longer remain a part of any of the European Union’s political institution. In this transition period the terms for future UK-EU relationship will be decided. Dialogues have started in March and will continue over the months with prime concern to a new free trade agreement which will allow UK good to move freely around the EU without extra charges. Aside from trade many other aspects like – law enforcement, data sharing and security, aviation standards and safety, access to fishing waters, supplies of electricity and gas, licensing and regulation of medicines will also be decided.

Economist expect that Brexit will have damaging immediate and long time effects on both the economy of UK and at least part of the EU. Economists are in consensus that Brexit will likely reduce the UKs per capita income and studies have shown that Brexit has reduced British GDP, British National Income, employment and British International trade from 2016 onwards. The UK governments own Brexit analysis has shown that the economic growth would be stunted by 2-8% in the following fifteen years after Brexit. Brexit would eliminate Britain’s tariff-free trade status with the other EU members. Tariffs would raise the cost of exports. That would hurt U.K. exporters as their goods become more expensive in Europe. Tariffs would also increase the prices of imports into the U.K. More than one-third of its imports come from the EU. Higher import prices would create inflation and lower the standard of living for U.K. residents. The U.K. is already vulnerable because heat waves and droughts caused by global warming have reduced local food production. The U.K. would lose the advantages of the EU’s state-of-the-art technologies. The EU grants these to its members in environmental protection, research and development, and energy. Brexit has already depressed growth in London, the U.K.’s financial center. Growth was only 1.4% in 2018 and was close to zero in 2019. Brexit has diminished business investment by 11%. 

Brexit caused the European Union to lose its second-largest economy, its third-most populous country, and the second-largest net contributor to the EU budget. Brexit will result in an additional financial burden for the remaining net contributors, unless the budget is reduced accordingly. The UK will no longer remain a shareholder in the European Investment Bank. After Brexit the UK will leave the Common Agriculture Policy which provides government financial support to farmers in EU.


 Several organizations and institutions have started shifting their headquarters from London to other cities. Territories on the borders of UK will be affected. After Brexit, the UK will have the final say over the laws that govern it. The British parliament (and the devolved legislatures) can decide which elements of that law to keep amend or repeal. Furthermore, UK courts will no longer be bound by the judgments of the EU Court of Justice after Brexit. Concerns have been raised that Brexit might create security problems for the UK, particularly in law enforcement and counter-terrorism. The deal states that at the end of the transition period is in December 2020, while the rest of the UK will leave all of the EU’s institutions, Northern Ireland will have to keep to some of the EU’s rules. In some cases it will have to charge EU taxes on certain types of goods.

This situation will continue until a new agreement on the future relationship is reached, or Northern Ireland votes down the deal. Its government will have the opportunity to vote on the provisions of this deal after four years, and then at least every eight years after that.



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