UK’s Divorce from the EU: BREXIT – Glorious Opportunity or Grievous Error?! | DCR Workforce Blog

UK’s Divorce from the EU: BREXIT – Glorious Opportunity or Grievous Error?!

Starting with Japan, stock markets across the world reeled in shock and saw big drops with the results of the June 23 Brexit poll in the UK – where the voter turnout was high at 71.8%, and the vote went 52% to 48% in favor of Britain to exit the European Union (EU) or “Brexit” as it has become popularly known!

Pound Sterling took an immediate and severe beating – unprecedented since the 1970s when it was first floated, as did UK’s real estate. David Cameron, the man who started this historic event rolling when he promised to call for an in-or-out referendum – has resigned his post. The world is shocked and in disbelief – and worried about the far-reaching effects of Brexit, such as a domino effect with more countries leaving the EU and laying the ground for possible conflict in the region at some future date.

The EU operates as a ‘single market’ with people, services, money and goods moving around its 28 member countries as if they were one country, avoiding tariffs with the Euro as the common currency for 19 of them. It has its own parliament, which rules a wide range of subjects such as the environment, transport, consumer rights and other matters for the total region.

Oh, what a falling off was there!

In the aftermath of the “irreversible” result favoring Brexit, most people are now found questioning the need for such a referendum with some calling it an irresponsible act by the British government. As with any closely called result, many are dissatisfied with the outcome. Reports show the British Googling the internet for information on what the EU is…with some now regretting their “Leave” vote…now that the divorce is looming on the horizon.

But the reaction of the world and the negative economic outcomes, which are already visible and quite dramatic, were enough to make them realize that they may have been too hasty, as regret sets in.

Foreign investments into the UK may slow to a trickle as the economic uncertainty of Brexit is bound to keep investors away until things settle down. United Kingdom citizens working in the EU and vice versa will face tremendous uncertainties as will businesses. And what about trading relations between the UK and the other countries in the EU? Uncertainties abound. Given the xenophobic nature of the vote, Britain is already witnessing situations where overt racism is becoming rampant!

The Brexit divorce and its underlying causes

The exit is approved by people who question the need to pay membership fees to the EU and, in most cases, don’t like other European nationals coming to live and work in the UK. They may also have resented the EU exerting an influence and control over the UK which ran contrary to their memories of the glory of the British Empire!

Like any divorce, there are often numerous underlying causes. Here are a handful:

  • With the growth of Scottish nationalism, the identity of the English people is coming to the fore. Many want their own political system much like the Scots, the Welsh and the Irish have. Some even question whether the concept of the United Kingdom itself may start unraveling as the UK stands to lose the faith vested in it by Scotland and Northern Ireland because they both voted to remain in the EU, at 62% and 55.8% respectively.
  • Generational differences played a role as older people were keen to achieve a return to the status quo ante – before the UK joined the EU. Many of them are now reported to be reconsidering the exit vote, especially in the aftermath of the Pound Sterling’s fall and other reactions from around the world. In contrast, the younger generations as well as the educated and rich wished to remain with the EU. The day after the vote, there were calls for London to leave the UK – as most Londoners were keen to ‘remain’ and not to leave. Many youngsters want to emigrate out of the UK too.
  • Once the UK leaving the EU is fully official, which may take up to two years, work permits and travel for work or pleasure across the EU will affect UK citizens working abroad and other nationals working in the UK.
  • Approximately half of the immigrants in Britain come from the EU’s 27 states (without a concrete job offer in hand). The fact that net migration (people who migrated in minus people who migrated out) into the UK in 2015 stood at 330,000 – though the Cameron government promised to keep the number in tens of thousands – seems to have triggered the wish to vote to exit the EU.
  • Ever ready to believe in their racial and cultural superiority, some towns in the UK found the influx of workers from other EU countries highly upsetting and in many cases, found their behavior unacceptable. They were also seeing them as a threat to their own jobs, welfare and wages. Most believed that immigration puts a huge stress on their social services and may even threaten their national cohesion. All the emotions against the establishment came to the fore, as Britain went to polls to ratify the alliance.
  • Many pro-Brexit voters feel that immigrants are putting pressure on public services in the UK like its National Health Service and social welfare system. Others believe that immigrants not only pay their way, but also bring prosperity to the UK with their efforts. People in unskilled jobs fear losing their jobs to the Europeans.
  • Pro-Brexit voters also campaigned for a “points-based immigration system” (already in use in Australia, New Zealand and Canada) that allows immigrants with certain skills and qualifications that are “worth” more than others to an economy. The more in-demand the skill is, the more points a prospective immigrant will get, and only those who reach a threshold would be eligible for a visa. While the system is seen to increase skilled immigrants into these countries, the UK wished to limit the numbers even though the EU citizens already living in the UK are offered protection from discrimination.
  • People weren’t looking at the EU from an economic standpoint at all because many who voted were not having an opinion on such weighty issues. The vote was not even about the Euro 20 billion membership fees that the UK was paying annually to the EU. It was about legitimacy, independence, citizenship, influx of immigrants and anger toward the establishment, culminating with a reaction arising from their feelings of somehow being let down.
  • Working class England is not only hostile to foreigners, it’s also hostile to rich Londoners. And it’s definitely resentful of anyone who wants to tell them how to think and how to vote.

There is no doubt that, marred by undertones of xenophobia, racism, nativism and Islamophobia, the vote was an emotional decision instead of being a rational one. It’s laced with bitterness, hatred and violence marring the debates running up to the vote.

Possible fallout from a hasty divorce

This sudden divorce is not petitioned for yet! The United Kingdom will have to re-negotiate the future terms of its current trading arrangements with the EU before it can leave.

And, as in the case with parents, the parties will still have to deal with each other! The exit has two routes – one is through negotiation between the UK and the EU, and the other is that there is no withdrawal agreement and the UK ceases to be a member two years from notifying the EU it intends to leave, but must still abide by all applicable laws until such a time. What a long, drawn-out battle it becomes.

What does the UK have to look forward to? Potential fallout includes:

  • The EU will be destabilized and may face further threats to its solidarity with others such as Denmark and the Netherlands – countries also considering the exit option.
  • Trade will be affected as proven by the way the Euro fell against the dollar and the yen in the markets, with no recovery in sight.
  • The UK will have to re-establish foreign policy and security links with the various members of the EU, and its absence could weaken the EU’s defense. They may be a risk of conflict in the offing.
  • Should the UK wish to return to the EU, it will have to start from scratch and seek approvals from the other members and be in no position to make any demands or seek any rebates. This could mean adopting the Euro as its currency.

The result of the referendum will not be legally binding on the UK unless the Parliament of Britain passes the necessary laws with both the House of Lords and the House of Commons ratifying the decision to leave the EU. With the resignation of the Prime Minister, Britain may go to polls again – at which time the parties may once again bring up the issue of the Brexit as a part of the election mandate and seek a reversal.

Seen for long as an empire on which the sun never set as it straddled the globe while simultaneously  reviled as the poster-child of colonialism, slavery and xenophobia, the UK may see itself diminish and become small and lonely in stature – all because of the decision to hold this referendum.

Only time will tell if the Brexit is a glorious opportunity bringing in prosperity or a grievous mistake that’s set to irrevocably reverse its fortunes!

What do you foresee for the UK’s Brexit vote on the workforce?

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.