Brexit is a term used to refer to the long winded process of the UK’s withdrawal from the EU. Economic interests of the UK have been deeply vested within the EU for decades. The roots of the EU date back to 1951, with Churchill being one of its founding fathers. In June 2016 a national referendum to exit the EU was passed in the UK by a slim majority. Now the country has till the end of March 2019 to repeal every single act and regulation which constituted her EU membership, and to renegotiate all trade accords from scratch. These agreements number in the hundreds. 29 March, 2019 has been designated as ‘exit day’. This article breaks down what these changes mean for expats in the UK.
Expats in the UK can be classified into two broad groups; those originating from within the EU and those immigrating from outside the EU. The former group will face the brunt of the impact. Brexit will spell the end of Schengen and other free transit agreements for the UK. The central tenet of the European Single Market (ESM), namely the free movement of goods, capital, services, and labour will cease to exist. EU expats in the UK may expect to face crippling limitations on travel, work and education. They may need to get visas, work permits and other tedious paperwork just like other expats. Those who aren’t legally obligated to return to their home countries will find the UK a markedly less attractive destination to live and work.
Non EU expats
Immigrants from outside the EU have never enjoyed any special freedoms or privileges related to working in the UK. Consequently, very little is expected to change for them as a result of Brexit. You can continue to work as per your terms of employment and send money from UK to your family back home.
The imminent restrictions on the movement of EU expats post exit day rather serve to level the playing field. With identical visa and permit regulations for all expats, UK employers may well find it cheaper to employ skilled workers from outside the EU. This can greatly improve employment prospects for skilled migrants from countries such as the Philippines, India and Mexico. However the opposite could happen as well. UK citizens being forced to return from the rest of EU could saturate the UK job markets.
Another uncertainty is related to UK employers. With the loss of their major markets businesses may no longer find it profitable to manufacture in the UK. Over the next few years we may see a major relocation of UKs big business, along with thousands of jobs, to countries with cheaper labor and large markets such as China.
Some of the impacts of Brexit will be felt across the board. Currency exchange rates are bound to fluctuate wildly close to and post exit day. The GBP is expected to grow weaker on account of UK businesses losing privileged access to European markets, among other factors. Some analysts are advising expats in the UK to spread their forex ownership into multiple currencies. Stock markets are expected to go through wider than usual upheavals. Any expats who own ESOs or have dealings in securities should account for these factors.
More than two years after the referendum and many rounds of negotiations later the finer details of Brexit negotiations are still to be finalized by the same leaders who ushered Brexit in so enthusiastically. We’ve been hearing colorful terms such as ‘red, white, and blue Brexit’ and a ‘hard or soft Brexit’ from the likes of Theresa May. While according to article 50 of the treaty on EU all agreements will cease to apply on exit day, some analysts maintain the skeptic optimism that a portion of the prevailing agreements will remain unchanged.
With the deadline on the horizon and no clear solutions to fall back upon, those closer to the heart of the issue are preparing for the worst. On July 29, 2018 the Times carried an article stating that “ (the UK’s) Ministers have drawn up plans to send in the (British) army to deliver food, medicines and fuel in the event of shortages if Britain crashes out of the EU without a deal”. That official assessment paints a troubling portrait of the anticipated impact of Brexit.