Brexit: What Exactly is Going On?

brexit signpostsYou may just remember the date Thursday June 23, 2016. That was the day that all of our lives were meant to change, with the UK public voting to leave the European Union as part of the Brexit referendum.

More than a year later and we don’t seem to be any closer to leaving, do we? There have been some identifiers of our decision to leave the EU – a few economic hiccups here, a few trade deals ending there – but all in all, life hasn’t changed all that much for the vast majority.

So what the heck is going on then? Are we leaving the single market or not? And what does all this hesitancy mean for British business?

DD Hoping to Avoid Making a Boob in Negotiations

The negotiations between the UK and Europe are being handled by David Davis, the Conservative MP who has been installed as ‘Brexit Secretary’ for the duration of the talks. He has been meeting with the EU’s Michel Barnier as he seeks to secure the very best deal for the United Kingdom.

This is a huge moment in the political career of Davis, who along with ensuring the Brexit deal is as desired will be hoping to impress his fellow Tories and the British public with his negotiating tactics. He is expected to be one of the strongest candidates to lead the Conservative Party if/when Theresa May leaves her post, with the bookmakers placing Davis as favourite in the Next Conservative Leader market and as short as 9/2 to be the next Prime Minister, a shade behind Jeremy Corbyn (10/3) and ahead of Boris Johnson (10/1).

So, these Brexit negotiations are crucial for David Davis, and let’s hope he manages to secure the very best deal for all concerned.

Forward Motion

While Brexit talks were put on hold during the UK general election and the subsequent fault, they are – quietly – back under way, with nearly 100 officials involved in the administrative process.

So far discussions have revolved around the rights of UK citizens, matters regarding the Irish border and separation (wonder if the DUP have had any influence on that) and financial issues regarding the break-up.

One of the hot potatoes that is on everybody’s lips is trading. Will UK firms still be able to readily trade with their EU counterparts, and vice versa? How will imports and exports be affected? So far, talks have not begun regarding trading operations between the UK and EU, but it is the one topic that business leaders on both sides of the divide are desperate to hear more about.

And the cost of the so-called ‘divorce bill’ is yet to be finalised, and may not be until next year according to reports. Initial estimates were placed at €100 billion, although that idea has been pooh-poohed by leading UK figures.

But if that is the kind of ball park figure to be expected, let’s hope we’ve made the right decision as a society to depart the single market.

Hard or Soft?

Even if you only have one ear to the ground when it comes to politics, you can’t help but to have heard about whether the UK needs a hard or soft Brexit. Again, what the heck does that even mean?

A hard Brexit will be a clean and decisive break, according to those who crave that. The ‘hard’ part of the equation is that Davis and co will play hard ball when it comes to negotiations, and that the UK will leave the European Union in March 2019 come what may.

A hard Brexit means no compromise, and that includes such salty topics as the movement of people and trade deals. If successful, the UK would leave the single market agreement and open up the possibility of trade deals with the likes of China, India and North America. The upshot is that UK firms with a significant presence within the EU already could be severely hampered.

The notion of a soft Brexit has taken on greater significance since the General Election, with the improved performance of the Labour Party – key advocates of a softer EU deal – suggesting that a more democratic stance is the general view of the British public a whole year after the original referendum.

The softer Brexit deal would maintain links with the EU from a trade and economic perspective, with the free movement of workers between member states also upheld.

There are countries, including Norway and Iceland, who aren’t members of the EU but who are able to access the single market as part of a raft of trade deals. They must accept the ‘Four Freedoms’ of people, services, goods and capital, and this would serve the idea of a soft Brexit well.

Which way will we go? Who knows….and we might have to wait a year or more to actually find out.