Brexit weekly: 5 things

By Elias Papadopoulos February 17, 2017 2:17 pm

Negotiations in numbers

Brexit was always going to be a massive diplomatic, political and legal exercise, but now more precise numbers have emerged as to the scope and size of the project. This week Politico summarised a series of European Parliament reports on different aspects of Brexit. Among the range of findings, one is particularly stark. There are 20,833 pieces of legislation affected by Brexit that UK officials will need to review and action. That amounts to about 40 pieces of legislation per day, assuming 500 working days until the legal deadline for Brexit in 2019, in order for Britain to have robust frameworks in place for a range of sectors in the post-EU world.

That’s in addition to other potentially thorny issues, including:

  • Health insurance for holidaymakers
  • Potential UK contributions to the EU budget on exchange programmes, the Common Agriculture Policy, and Horizon 2020 among others
  • Financial passports for UK businesses
  • Payments to UK staff in the EU Institutions, including pensions, covering a total of 3,800 people at an estimated cost of €7 billion.

Politico’s analysis is a sobering outline of the volume of work British officials have in front of them over the next two years. The media has long suggested the civil service may lack capacity to deal with Brexit, and Politico’s analysis will do little to dispel such notions – while also highlighting why organisations across the piste will have to be in close contact with government departments to ensure their sectors aren’t lost in the minutiae.

CETA and the UK

This week the European Parliament plenary voted in favour of the EU-Canada Comprehensive Economic and Trade Agreement (CETA). The decision was viewed in the Brexit camp with an air of optimism. Some rushed to point out the deal was under discussion for seven years and was almost derailed in late 2016 due to the objection of the Belgian region of Wallonia, adding that “Global Britain’s” historic, linguistic and cultural presence in most parts of the world means that such deals will be easier for the UK.

While such optimism is to be expected among Brexiteers, not to mention being a raison d’etre for the Department for International Trade, CETA still took the best part of a decade to negotiate, and British negotiators will have their work cut in rapidly advancing future negotiations on overseas deals. Meanwhile the UK remains bound to the EU until the Brexit process is completed, unable to formally negotiate alternative trade arrangements. While, positivity (and perhaps relief) surround the conclusion of CETA, the UK still faces a significant challenge in negotiating overseas trade deals, particularly if these have to fill a Single Market sized hole after 2019.

Work longer to retire

UK Government pensions adviser John Cridland warned this week that the UK pension age might have to be substantially increased to compensate for the “Brexit factor”, potentially making the future of the system uncertain. Brexit is expected to reduce the number of working age migrants employed in the UK, altering the worker-to-pensioner ratio which is essential for maintaining the sustainability of the system. This would mean either a increase in the pension age, a reduction in the pension level or an rise in taxation, all of which would be unpalatable to UK voters.

While the Budget is to be presented by Chancellor Philip Hammond on 8 March, it would perhaps be precipitous for it to include measures to address Mr Cridland’s warnings before formal Brexit negotiations have even commenced. But it’s reasonable to expect the issue of paying for the welfare state to be a significant one for Remainers, particularly as Parliament will be given a vote on the deal negotiated by Prime Minister Theresa May.

Mixed picture on “Brexodus”

A survey by the Chartered Institute for Personnel Development (CIPD) has shown that more than a quarter of employers have said that their staff from EU countries have considered leaving their firms or the country in 2017 after last year’s Brexit vote. The education and healthcare sectors were particularly affected, with 43% and 49% respectively saying staff have indicated they might leave their employer or even the UK. Employers who rely heavily on EU migrant workers were struggling to fill vacancies, with the retail and wholesale, manufacturing, health and accommodation and food services facing particular difficulties.

Meanwhile, a poll of 500 senior decision makers from large UK companies has found that 26% felt Brexit would not have any impact on their ability to find and hire competent employees, with 42% saying they expected a positive effect on recruitment.

What about the Shetlands?

Amidst all the talk about a second Scottish independence referendum, spare a thought for the Shetland Islands and its pursuit of greater autonomy. The oil and fish-rich island cluster in the North Atlantic, officially part of Scotland, has been in many ways an outlier, being one of only two parts of Britain to vote against membership of the European Economic Community in 1975 (the other being the Western Islands of Scotland), and voting against Scottish Independence by a much higher margin (63.7%, compared to 55% on average). With talk of Scottish independence on the agenda again, the Shetlands are bringing up their demand for greater control of their seabed and a fairer share of their contribution to the UK economy through taxation and oil revenues.

Given talk of a second Scottish independence referendum has been given short shrift in Westminster, the chance of the Shetlands absconding from the UK seem remote at best. However, the suggestions of a Scottish referendum have been accompanied by demands from First Minister Nicola Sturgeon for greater powers to be devolved to her Assembly. This may be where the Shetlands have an opportunity to capitalise.

 

For more information about the Brexit process, the people involved, how it’ll affect business and the views of EU Member States, visit Project Brexit by clicking here.

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