Although there was a lot of appeals from political and economic leaders all around the world for Britain to stay in EU and although the IMF, the OECD, the IFS experts lined up to say economic growth would be hobbled, unemployment would go up, the pound would plummet and although the Treasury has issued a series of dire warnings, even claiming that Britain would be plunged into a year-long recession in the event of Brexit- In a memorable choice on Thursday 23rd of June 2016- the population of Britain voted in favor of a British way out, or Brexit, they weren’t convinced by what they were told and they prefer to exit.
This action poses an important question, about the reasons behind Brexit. Actually there are a lot of reasons behind voting out. The British people took this step because there is deadlock and inflexibility in the house stemming from a variety of issues which are all EU related issues. British people, thought that the EU held back Britain with too many rules and regulations and that the EU was gaining control of Britain.
Record levels of EU immigration to the UK was one of the huge causes that affected the vote. The issue fed into wider questions of national and cultural identity, which suited Leave’s message – particularly to lower income voters. The result suggested that concerns about levels of migration into the UK over the past 10 years, their impact on society, and what might happen in the next 20 years were more widely felt and ran even deeper than people had suspected.
Eurosceptics argue that leaving the EU would allow Britain to regain control of its borders in order to curb soaring immigration and increase security. The people of the UK believe that the EU has not done a good job in controlling the immigration crisis. As a result, British people claim that their jobs and schools have been taken over by immigrants due to weak controls over borders. The UK was contributing a lot to the EU budget and it saw itself as being able to stand up on its own feet economically without the help of the other EU members, so it believed that Brexit would make sense economically in some form.
It worth mentioning here that the UK’s relationship with Europe has never been simple or static. It took the country years to join what was then the European Community. There have been decades of scepticism towards the EU among politicians and in large parts of the UK media. The younger generation was generally seen as pro-EU but it remains to be seen – once the details of the voting are looked into – how the result broke down by age. What appears clear from the campaign is that the vote to leave was as much a statement about the country’s national identity, and all that involves, as it was about its economic and political future.
Most of the voters who voted to exit they believed that this decision will make immigration laws stricter and deport current migrants. In addition, most British people are unhappy with the fact that there is a high unemployment rate amongst themselves and Brexit was seen as a solution to this issue. Increasing number of migrant workers from Eastern Europe taking over British jobs. UK citizens believe that the EU is bureaucratic and the UK is a democracy. Hence British citizens want to have their own rules and regulations rather than being imposed by others. The British people think that the EU are strict, centralized, regulated and controlled, and therefore will not succeed in the economic world in the future.
For example, there are a lot of restrictions made by EU legislations that inhibit the required agricultural production by British fishers and farmers, and therefore, products’ prices are higher than they should be. They argue that leaving would allow the UK to diversify its international links, and this is one of the factors that affected on Brexit. There have also been claims by people of the UK that they would like to see Britain great again as they were in the 1970’s. With UK exiting the EU, they will have their own trade deals with other nations and legislate in the interests of the British manufacturing industry.
Needless to say, the vote out sent shockwaves all around the world, Since the referendum results have been released, the global economy started going downhill. The British Pound Sterling has dropped in value against other currencies to its lowest level since 1987, Emergency steps are being taken to calm the economic turmoil. We have seen immediate actions from Banks like JP Morgan and Citibank have started shifting their investment division employees out of their headquarters in England and moved them to places like Dublin and Frankfurt in order to be able to perform better when it comes to investment decisions.
In the short and medium run, The economy will suffer from recession, higher unemployment, which may result in cut of Interest rate and further easing quantitative easing, Slowdown in housing market transactions (as of experts’ expectations decrease by 15%) which will put down pressures on property prices in the short term, Low pound value will alert international property investors from all around the world to take this advantage from attractive exchange rate and buy more properties in UK, houses’ prices will fall in the short term.
But in the long term it means that we will have shortage in housing market, which will lead to increase in prices again in the medium to long term, As buyers will adopt wait and see policy, demand for rental accommodation expected to rise, As housing supply falls, demand from tenants will increase as the cost of renting will rise across the country. Furthermore, As a result of vote out, the UK will no longer have free movement of the concept of a single market with the EU. This means that British people will now require a visa to visit neighboring countries. On the other side, Immigration, visas and work permits for the UK will become much more to difficult to obtain.
Trade will be restricted because of regulations that will be in place that make it harder for goods to move around since the United Kingdom is not a part of the European Union. Multinational corporations that are headquartered in London expected to move elsewhere to be within the European Union which would lead to job losses. It will take a while for businesses and companies to find ways to run business and matters as their situation have changed significantly. Many have been thinking of relocating due to costs and issues on that line.
By Dr Wafaa Sbeiti