Changes present as Brexit takes effect in the United Kingdom

Potential reliance on United States threatened by COVID-19 economic recession

A momentous change struck the United Kingdom after the poll results of the Brexit referendum in June 2016; 52% of the population voted to leave and 48% voted to remain in the European union.  

The day after the Brexit poll, there was a spike in searches for “what is the EU” and “what is Brexit” across the U.K, according to NPR.

With reservations about European integration, immigration and its historically individualistic stance of maintaining less integration than other EU states, the foundation was set that Britain would in fact leave its partnering regions. 

According to the Washington Post, “in the past few years the scores of refugees and migrants traveling to Europe from the Middle East and Africa have made British concerns about immigration from non-E.U. nationals worse.”

The U.K.’s official exit from the European Union on Jan. 31 marked a shift in many of its national policies, which have proved to be a problem for its economy and citizens alike. 

As of this year, the U.K. is in a position where terms of a new relationship with the EU can be negotiated in the following 11 months. Within the duration of this period, the U.K. continues to stay in the EU ‘s Customs Union (a group of countries which agree to free trade and same import duties within themselves) and Single Market (which works to guarantee free movement of goods, capital, services and labor) but the country will not remain affiliated with them, and there will no longer be any British Members of the European Parliament.

According to Economics teacher DJ Cook, the U.K.’s pound is decreasing in value, the housing and manufacturing sectors are slowing down and there are a variety of small cuts of economic damage. Cook explained that while it may appear that the U.K.’s economy was minimally affected by Brexit, there have, in reality, been a variety of small problems that have built up since.

“Have you ever heard the expression ‘death by a thousand papercuts?’ That’s what Brexit is. It’s not one sledgehammer like, “Sorry, Brexit happened, everything’s dead,’ it’s the death by a thousand papercuts and they’re finally starting to realize that,” Cook said. 

While the EU has attempted to execute plans to combat negative economic effects, it still faces a multitude of challenges. With hopes for a future trade deal, the U.K. desires access to providing its goods and services to the EU, yet according to the BBC, “the government has made clear that the U.K. must leave the customs union and single market and end the overall jurisdiction of the European Court of Justice.” 

As of now, the U.K. is a member of the European-wide trading bloc, a trading alliance that covers every EU country and Turkey. To leave the Customs Union means the U.K. would be free to set its own import tariffs and hammer down its own trade deals with the world, a risk that will affect businesses as taxes on goods will change.

According to the Guardian, production rates are the lowest they have been since the U.K.’s entrance into the Industrial Revolution. Between 1760 and 1800, productivity growth was roughly -0.13% (before the rise of steam-powered machinery). The productivity increase for 2010-2019 was placed at about 0.3% in December 2019, less than half of a percent higher. 

“They were the first country to enter into the Industrial Revolution, so they’ve never seen an economic slowdown that was a self-inflicted wound like this since the Industrial Revolution,” Cook said. 

As Britain’s economy continues to suffer from hit after hit, it has turned its eyes to the United States for aid. According to Cook, however, the U.S. is projected to only increase its percentage points of growth very minimally in the foreseeable future — nowhere near enough to help pull the country out of its economic difficulties. If the U.S. finds itself in a recession, the percentage may drop into the negatives. 

In times of recession, the U.S. will not be able to buy or send over as many products to the U.K. In addition, the financial hubs of the many major corporations have also moved from London to Paris, inflicting another economic wound onto the U.K.’s surface, according to eFinancial Careers

“[Britain] is losing a bunch of money, they’re losing a bunch of trusts, they’re losing a bunch of investments. The financial sector of the world left London and went elsewhere, and now the growth rate that they’re depending on is 0.16%, and that’s only if the United States doesn’t enter into a recession,” Cook said. 

According to Bloomberg, with COVID-19 the chance of an American recession has hit 100%, as of an update to its recession model on April8. To combat such an economic downfall, President Donald Trump has signed the biggest relief package in history: about $2 trillion. 

And according to CNN, the rest of the world is in a similar state. Data from China displays a low economic point overall; a 20.5% decrease in retail sales during January and February and an unemployment increase to 6.3% in February from December’s 5.2%. An economic recovery looks unlikely in the near future. 

“You’ll hear the other side often say, ‘See, told you, Brexit wasn’t a big deal,’” Cook said. “We haven’t even seen the total effects of Brexit yet, and you can ask anybody who lives in the United Kingdom; it is certainly something that is a daily thought in that country, and they are feeling the effects of it.” 

Alumna Samantha Heller lived in Kings Cross, London for about four months after having graduated from OPHS. She did her first semester of college at The New College of the Humanities in Bloomsbury. During her time there, she noted what sort of effects Brexit had on her surroundings. 

“The danger of Brexit was and is still how little the populus understands of its global consequences. Very few people read beyond the headline. They focus on the short term, or the social aspects,” Heller wrote. “Most conversations I had in class as well as overheard during the time I spent in London reflected this idea.”

There were, from the beginning, criticisms of the Brexit plan, found commonly in the speculation that Brexit was fueled by racist and xenophobic sentiments, according to the Washington Post. The U.K.’s Independence Party, headed by Nigel Farage, has been a major proponent behind the U.K.’s exit from the EU. Farage has been quoted to refer to the U.K.’s black population by explicit slurs and the Chinese population by multiple other names.

Criticisms of the plan have created a schism between those who are in favor of the Brexit movement and those who oppose it.

“The actual split from the EU was postponed until after I moved home so I don’t really have any firsthand encounters with the aftermath. However, I did encounter quite a few protests. There were always a few people outside the House of Parliament in Westminster protesting both in favor of and against Brexit. The atmosphere around Brexit was not unlike that of the 2016 American presidential election,” Heller wrote. 

According to the British Broadcasting Channel, the U.K. has seen a spike in “hate crimes” since the 2016 Brexit referendum. Gwent police, for example, reported 651 hate crimes from 2018-1919, as opposed to 374 from 2015-16. 

Additionally, according to The Guardian, Eastern European students across England and Wales have faced a rise in racism and xenophobia in school settings. 77% of students reported having dealt with bullying, xenophobia and racism, though it was often brushed aside as banter.

Some have blamed the Brexit decision on anti-immigration and anti-refugee sentiments, stemming from the desire to keep refugees or immigrants out of the U.K. 

A key issue in relation to the exit from the EU by Britain was the before unseen influx of immigration from Africa and the Middle East. To further the existing anti-immigration campaign, Farage used media in ads that depicted masses of immigrants in crowds. Tensions ran high between those on opposing sides of the issue, according to the Washington Post.  

In the long-term view, experts speculate that Brittain’s gross domestic product, commonly referred to as the GDP, per capita “will be 6.3-9.5% per year lower than it would be if [the U.K.] were to remain in the E.U.” For citizens, that would mean on average an 8% pay cut, meaning a lessened number of teachers, nurses and police.

Consequently, Scotland is now considering independence from the U.K. The Scottish government believes that to remain in the EU is the best option for both Scotland and the U.K. as a whole. If the Scottish government calls for a referendum on independence, it could apply for its own membership in the EU. 

In 2016, when Brexit initially occurred, Scotland held a referendum to decide whether to leave or remain with the U.K. At that time, voters chose to remain by 62%, while those across the U.K. as a whole chose to leave by 52%.

Based on recent polls, there is an increase in support for the idea of leaving the U.K. However, the difference in numbers of those who would vote to leave the U.K. versus those who would choose to stay is slim.