The United Kingdom is set to leave the European Union on January 31, 2020. Here’s a look back at how Brexit came to be and what’s next.
After three years of deadline extensions and leadership changes, Brexit is about to become a reality.
Prime Minister Boris Johnson’s Conservative Party secured a majority of seats following the U.K. election in December. As a result, Johnson’s Brexit plan is moving full steam ahead with the backing of members of Parliament (MPs).
If all goes according to Johnson’s plan, the U.K. will officially exit the European Union on Jan. 31, 2020. This will then start the 11 month transition period. The purpose of this period is to allow the U.K. and EU hold another set of negotiations to discuss future relationships, according to the BBC.
It is also during this transition period that many employers will examine the potential impact of Brexit. There are already early signs of companies being more cautious, given the uncertainty in the U.K. No matter how the remainder of the Brexit process plays out, it will have an impact on global mobility.
The Path To Brexit
The path to Jan. 31, 2020 has been tumultuous. The public voted for Brexit nearly four years ago and afterward, Prime Minister David Cameron resigned.
Theresa May would succeed Cameron and attempted to lead the U.K. through the Brexit process. In an effort to gain more support for her Withdrawal Agreement in Parliament, May called for a general election in June 2017. Calling this election did not go well for the Conservatives, as they lost 13 seats and had to form a minority government with the Democratic Unionist Party.
Over the next two years, May struggled to deliver Brexit to the U.K.
Parliament voted down May’s Withdrawal Agreement three times. Brexit was delayed and May stepped down in the summer of 2019. Johnson succeeded her and struggled to pass his entire Withdrawal Agreement. As such, the EU extended the Brexit deadline from Oct. 31 to Jan. 31, and Johnson called for an election.
Conservatives gained an 80 seat majority in Parliament and promptly passed the deal with ease. As of Jan. 27, the U.K. is on track to leave the EU.
All the chaos that has ensued since the referendum is head-spinning. It took three Prime Ministers and a general election to find a way forward. While the next stage is not an easy or certain one, internal passage of the Withdrawal Agreement gives the U.K. a modicum of stability. Fingers crossed the EU Parliament doesn’t throw a spanner in the works during the vote on January 29, said Stephanie Lewin, Head of Global Immigration, Envoy Global.
Brexit’s Impact on Global Mobility
According to Envoy Global’s upcoming 2020 Immigration Trends report, uncertainty surrounding Brexit has had an effect on businesses around the world:
- 46% uncertain about economic stability
- 43% uncertain about the impact to EU nationals
- 42% uncertain about travel restrictions
One of the biggest questions surrounding Brexit is the freedom of movement between the U.K and the EU. Essentially, EU, EEA or Swiss citizens and their families can apply to the EU Settlement Scheme to continue living in the U.K. after June 30, 2021. There’s also the question of what happens to the Freedom of Movement, which allows EU citizens to work and live in member countries without discrimination. The U.K. government has said that short-term visits will still be OK, but the process for EU citizens wishing to work in the U.K. is still being determined.
More so, the U.K. would need to agree and ratify new trade deals with countries, including the U.S. New trade deals could potentially influence how businesses proceed with upcoming projects:
- 31% – We’re in a holding pattern with current and upcoming projects
- 29% – We’re more likely to do business in the EU
- 28% – We’ve had retention issues
- 25% – We’re moving employees out of our U.K. office
- 19% – We’re moving projects away from the U.K.
Needless to say, companies are treading carefully when it comes to European and U.K. operations.
One would think that after three years of planning, companies would have a solid plan in place as to how to manage employment of EU nationals post-Brexit, said Lewin.
Unfortunately, there has been so much uncertainty by the British government as to how EU nationals will be treated, many have left the U.K., as evidenced by recent migration numbers. In a world where there is already a talent shortage, the concern is now whether the U.K. will be able to attract the talent it needs given that a new immigration points system will be put in place from 2021.
Big Name Companies Planning Ahead
Large corporations aren’t waiting for Brexit. They’re acting now to ensure they aren’t caught flat-footed, regardless of whether Brexit occurs or not. Take JP Morgan Chase, for instance.
Reuters reported the financial firm is expanding its presence into Paris after purchasing a building centrally located in the city. The firm plans to relocate sales teams and trading staff to Paris from London following Brexit.
JP Morgan isn’t the only company opening new offices in Paris. Bank of America, HSBC and BlackRock are moving jobs to France’s capital, The Financial Times reported. Additionally, Paris has attracted nearly 4,000 financial services jobs since the EU Referendum vote in 2016.
All signs point to the U.K. finally exiting the EU at the end of January. As Brexit becomes official, there really is an impact on global mobility. Companies will need to navigate these challenges carefully over the upcoming months and years.
Envoy is pleased to provide you this information, which was prepared in collaboration with Stephanie Lewin, who is the Head of Global Immigration at Envoy Global.
Content in this publication is not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult an Envoy-affiliated attorney or another qualified professional.