In a historic vote, on June 23rd 2016 United Kingdom opted to exit the European Union. The referendum was held as a part of former British Prime Minister David Cameron’s 2015 re-election campaign. The British exit from the EU or Brexit is considered under Article 50 of the Lisbon treaty.
The European Union (EU) is a politico–economic union of 28 member states that are located primarily in Europe which was established in 1993. Under the laws of the European Union there is free movement of persons, goods and labor in all the Member nations of the Union. The Brexit took place as David Cameron thought that the Union had evolved into a powerful bureaucracy which was trespassing upon British sovereignty and its opinions and national interest on issues such as trade, immigration, financial and labor regulation and social spending. Following this the former Prime Minister earned concessions from the bloc for the United Kingdom to be taken into more consideration on the above mentioned issue. This resulted in Cameron supporting the “anti- Brexit” campaign. However, more than half of the population was for Brexit to happen.
The immediate consequence of the Brexit was that the value of the pound fell again to a 31-year low of £1.315 on Monday June 27 – the lowest level since 1985.This was because of the unwillingness of the investors to put in money because of the taxation for the export and import of goods which wasn’t applicable since UK was a member of the EU. The UK has championed the single market, but outside the EU would no longer be an effective advocate of further liberalization. UK critics often complain about EU regulatory excesses, but many regulations are intended to create the level playing field the single market requires. A paradox of UK Euroscepticism is that following Brexit the UK would lose influence over EU regulation without gaining much freedom to regulate independently. Due to an aging population, UK was running on the effort of skilled workers which included immigrants from different parts of Europe. Now due to the exit, UK will have a shortage of skilled workers which will affect its production of goods. Also UK would lose its source of laborers for low wage jobs The EU will lose clout in foreign policy and military terms, with the loss of one of top two European powers, alongside France, that is a permanent member of the UN Security Council.
Personally, Brexit seems like a rushed decision, with a major portion of the population not really “knowing” what the European Union was. As per a survey after the referendum took place most of the people searched for what the “European Union” was. Also since a major portion of the population who voted for the exit were “senior citizens” they won’t have to face the after math of the move. Also the current UK Prime Minister Theresa May was against Brexit, so she will be compelled to take actions against her personal beliefs.
In conclusion, though UK exited the European Union in order to get freedom in matters of immigration, labor etc. and to have a control over its economy without the stringent regulations set by the European Union, it seems like the British economy will have to suffer from the immediate effects in matters of investment and taxation.