What is Brexit and why is it still happening?

The long process isn’t over yet, with the UK facing major disruption in months ahead

Adam Forrest@adamtomforrest
Tuesday 05 January 2021 19:39
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Brexit briefing: How long until the end of the transition period?

Brexit has created daily headlines, angry pubs rants and bend-your-ear analysis by taxi drivers for more than four years now. Yet the UK’s exit from the EU and its structures is still not complete.  

Brexit is a process, rather than one event. With a lot of important stuff unresolved, we still don’t know what the trading relationship between the two powers will be like in the months ahead. So why did Brexit happen, where are we now, and what happens next?

Didn’t Brexit ‘get done’?

In a way, yes, it did get done. In another way, no, it hasn’t properly happened yet. In June 2016 a majority of the British people voted to leave the EU; 52 per cent to 48 per cent.

Although the result was not legally binding, prime minister Theresa May – who replaced David Cameron in the aftermath of the result – made clear the people had spoken and the nation would quit the bloc. It kicked off an extremely messy period of delayed deadlines and attempts to secure the backing of parliament to negotiate the terms of Britain’s exit.

Read more: What are the remaining issues blocking a Brexit deal?

Boris Johnson, after he replaced Ms May, managed to forge a withdrawal agreement with the EU for a formal, political exit on 31 January 2020. It meant there are no longer any UK MEPs in the European parliament. But the withdrawal agreement was a bare-bones accord – full of fudges on unresolved border issues, and it didn’t even begin to sort out the economic relationship.

London and Brussels agreed an 11-month transition period from the end of January 2020, during which time the UK has followed all the same EU rules as before – including single market and customs union arrangements.

Why did it happen this way? Whatever happened to talk of a ‘soft’ Brexit?

Much of the post-referendum analysis found that fears over immigration was the single biggest reason behind the push to leave the EU. The Vote Leave campaign also won over some waverers by making the wildly dodgy claim that the £350m Britain paid into the EU each week could be spent on the NHS.

Yet successive Conservative governments, first under Ms May then Mr Johnson, were unable to guarantee either that immigration levels would fall, or more money would magically become available for the health service. This, and all the delay and uncertainty over the UK’s exit, created a rising sense of anger among Leave voters.

Boris Johnson campaigning for Leave

Although politicians across the spectrum advocated a “soft” Brexit – one in which Britain could forge a tailored, sophisticated agreement and stay part of the single market or customs union – most Tory politicians felt they had keep Leave voters happy by promising a clean, simple break.  

Indeed, Mr Johnson was able to win the Conservative party’s leadership by exploiting Leave voters’ sense of impatience. So even if there’s a trade deal, it looks like we’re headed for what used to be called a “hard” Brexit.

Read more: No-deal Brexit: What are the odds Britain will leave EU without a trade agreement?

So what happens on 1 January 2021?  

The Brexit transition period formally comes to an end when the bells chime on 31 December 2020. It means the UK will leave the single market and customs union – which have allowed British businesses to be part of the free, painless flow of goods and services across the continent.

Mr Johnson had promised he would sign a new, “all-singing, all-dancing” free trade deal with the EU that would replace these arrangements. But with only weeks to go, the PM has not yet done so.

The two sides are still deadlocked over three main sticking points – quotas for fishing fleets, rules on amount of financial aid the state can provide for businesses, and a mechanism by which any future trading disagreements can be resolved.  

Even if the outline of a deal between the two negotiating teams lead by the UK’s David Frost and the EU’s Michel Barnier can be struck in the coming days, it still needs to be signed off by the UK parliament and the European parliament – as well as leaders from the EU’s remaining 27 member states.

David Frost and Michel Barnier

What happens if there’s no UK-EU trade deal?

If two sides can’t reach a trade deal, the UK will have to trade with the EU under basic rules set by the World Trade Organisation (WTO). This would mean a wide, dizzying range of tariffs – a set of taxes or charges – being slapped on all imports and exports.

Last year the EU accounted for 43 per cent of all UK exports and 51 per cent of imports – so the lack of any deal with Brussels would be extremely damaging to the UK economy. British businesses would have to follow WTO tariffs when trading with many plenty of other countries in the world too.  

Read more: Will I need a visa to go to the EU after Brexit?

However, the government has managed to forge some “roll-over” deals with important trading partners such as Japan and Canada. They essentially replicate the arrangements the UK used to have in the EU. There are around 15 significant EU trade deals Mr Johnson’s government still has to “roll over” – including those with Mexico and Singapore.  

What happens if there’s a trade deal – will there still be disruption?

Yes. The government has admitted there will be disorder, although the minister in charge of the preparations, Michael Gove, has claimed there will only be “two to three weeks” of disruption. Logistics bosses fear it will go on for far longer.

Businesses trading across the EU border will face new customs declarations. Customs agents report being overwhelmed by pleas for help from trading businesses grappling with the rules. Confidential government briefings have revealed that the government is expecting, in the worst-case scenario, queues of 7,000 lorries in Kent and two-day delays crossing into the EU.

And some of those hopeful fudges made in the withdrawal agreement aimed at preventing a hard border in Ireland seem destined to become major problems. For instance, certain meat products – such as sausages and mince – will not be allowed to enter Northern Ireland from the mainland of Great Britain unless a new agreement can struck.

So it seems inevitable that we will still be talking about Brexit, and listening to angry rants about it, well into 2021 and beyond.

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