Although the official Brexit vote for the United Kingdom to leave the European Union (EU) took place on June 23, 2016, the talks regarding how the Brexit will occur are still taking place. Many world leaders are debating what impacts a hard or a soft Brexit will have on not only the UK, but on the global economy. Several business leaders in the EU feel that Brexit will be a disaster for both the UK and other nations in the EU. However, recent studies have shown that immigration reform and a “hard Brexit” is not as possible as politicians once believed.
How will Brexit impact UK businesses?
Although Global Future has predicted that immigration will be minimally impacted by Brexit, it’s important to note that the UK’s economy won’t be completely immune to Brexit’s impacts. Up until now, the UK has been a major player in the EU’s economic and political climate. The tech sector often viewed the UK as having a large role in the growth of several tech giants. TransferWise, for example, was considering expanding to build a headquarters in the UK – that is, until the Brexit.
Kristo Käärmann and Taavet Hinrikus, co-founders of TransferWise, were two of the biggest voices in the tech sector against the Brexit vote. “If the UK leaves the EU, we’ll have to consider whether it makes business sense to stay headquartered here. It’s a decision we don’t want to make but one that we’re having to consider,” said Hinrikus, before the Brexit vote took place.
Now, TransferWise is still slowly growing their UK office – but are considering headquartering elsewhere. In short, their co-founders still believe that Brexit could potentially result in a “disaster scenario.” Because a hard Brexit would put the UK at odds with many countries in the EU, many (including the TransferWise duo) believe that the UK will no longer be Europe’s tech-hub.
Many, including Hinrikus, want the UK’s government to come to a speedy Brexit resolution that’s helpful for both the UK and other nations in the EU. A hard Brexit, where the UK’s borders were closed, and all service or trade agreements were cut off, could be dangerous for the UK’s economy. Furthermore, it could mean that businesses in the UK who serve expatriates and immigrants – such as international money transfer companies (there are dozens of them) – could be negatively impacted with a fewer number of people to serve. However, it’s important to dig deeper to discover whether immigration will be impacted by Brexit as many conservative UK politicians have implied.
Will a soft or hard Brexit impact immigration more?
In short, the answer is neither. Immigration will be impacted by Brexit, but the difference in negotiations won’t have a colossal impact. Whether we’re faced with a soft or a hard Brexit, immigration will be impacted. Regardless of how negotiations with other countries who are members of the European Union go, any Brexit agreement reached will include a freedom of movement between the UK and other EU countries for the next four years.
Will immigration decline?
Many people have speculated whether Brexit will impact immigration. Several influential leaders have led people to believe that Brexit will restrict freedom of movement, which will have a dramatic impact on immigration. However, experts have recently said that Brexit likely will only cause a marginal immigration decline.
The conservative British government who helped to implement Brexit originally promoted the concept that any Brexit deals would restrict freedom of movement, allowing the UK stricter control over their borders. However, a new think tank, Global Future, has shown that this isn’t truly the outcome we can expect.
Global Future predicts that immigration into the UK will only fall by a maximum of 15% to 285,000 after Brexit talks are finalized across the EU.
Why is this?
Although some conservative, pro-Brexit leaders have used restricted immigration as a benefit to Brexit (and a harder Brexit, at that), it may just be a political tool. Boris Johnson, for example, has used the idea of immigration reform to promote Brexit and gain political authority within the UK. While this isn’t necessarily a bad thing, and immigration has been debated on a global scale for a long time, it is something to keep in mind as people from the UK look toward the next four years of immigration policy in a post-Brexit world.
For those who supported Brexit because they supported immigration reform, it’s key that we review the long-term impacts of reforming immigration to and from the UK. According to Liberal Democrat leader, Tim Farron, “The cost to the UK economy of being excluded from the world’s largest single market has been put as high as £200 billion over 15 years.” That’s a dramatically negative impact of intensely reforming immigration – despite what pro-Brexit politicians led voters to believe.
Ultimately, Brexit is bound to have a few negative repercussions. But, as we move through the negotiation process, it’s becoming clear to many people that the possibility of a “hard Brexit” that closes borders, limits immigration, and more is less feasible than many were led to believe when the Brexit vote originally passed.