The House of Commons has now published a briefing paper considering the impact of Brexit across a wide ranging number of policy areas. The key statistics make interesting reading. The UK make up 13% of the EU by head of population which demonstrates that our departure will have some significance. Gross domestic product as a percentage of the EU total is 18% and GDP gross levels, in common with Germany, are at the highest percentile, being 2% when the EU average including the UK is 1.2%. EU currently accounts for just over 44% of our export market and nearly 53% of our import market. Not only is the EU a significant market but, our significance to the EU is also apparent in the figures. Our EU budget currently stands at £5.7b including EU receipts to the private sector. Germany currently stands at £14.2b.
As the policy statement states, the EU is by far the UK’s most important trading partner. The UK imports more from the EU than it exports to it. The share of the UK exports going to the EU has declined in recent years. The EU has negotiated preferential trade agreements with other countries which will need to be re-negotiated as a result of Brexit by the UK.
The overall economic impact aside from trade is likely to be on areas such as foreign direct investments, UK’s contribution to the EU budget and the effect of immigration on the labour market. At present future contributions to the EU budget are unknown as this will depend on the post Brexit relationship with the EU which is a matter for negotiation. Members of the EEA (European Economic Area) contribute to the EU budget. Businesses in the economy will be affected by any difficulties in recruiting workers from EU/EEA countries and one possibility would be to restrict economic migration to high skilled migrants via a points based system. That would have an effect on employers using low skilled workers who would need to find workers with the same skill from a smaller pool of potential recruits. The significant level of support from the EU budget to certain regions of the UK will need to be carefully considered as there will be regions and sectors who lose out. Financial services will be considerably affected, hence the main issue being ‘passporting’ that sector.
So far as employment law is concerned, as the briefing paper makes clear, many examples of EU law have merely codified existing UK rights and there will be no social, political or economic reason for changing, for example discrimination law or maternity rights. There are however some EU employment obligations which have been resisted by the UK, for example agency workers’ rights and limitations on working time. One can observe from the policy documents that it is unlikely that there would be significant changes to the majority of employment law.
Areas where there may well be considerable uncertainty in the longer term relate to agriculture and fisheries and possibly defence strategy and spending.
The main areas of uncertainty short term at present continue to be the effect on migration, social security and the specific effects on Scotland, Wales and Northern Ireland.
For further information please contact Holly Dobson on 0114 224 2121 or at [email protected]
