Essex, along with the rest of the East of England, has voted to leave the EU. Two of the UK’s top 5 leave districts are in Essex: in Castle Point 72.7% of the voters chose to leave, while in Thurrock the 72.3% voted Leave. In Basildon, 68.6% of people voted to leave.
The total votes for the Eastern region are: Leave 1,880,367, Remain 1,448,616 – this means 56.5% of people in the Eastern region voted to LEAVE.
Overall for Essex, 999,283 people voted, which was more than 75% of the electorate, and of these, 62.3% chose to leave.
Clacton’s UKIP MP, Douglas Carswell, “tweeted” a photo of the Vote Leave campaign office saying: “Yes we did!”.
But, what does leaving the EU really mean for Essex, and the country as a whole? Much of the leave campaign was centered on immigration and the cost of financing the EU – but many people are now saying that these were not fair or even true campaign messages.
Does leaving EU stop EU immigration?
Immigration is one of the biggest concerns and many people thought that voting Leave was to force immigrants to actually leave the UK, and not to vote for the UK to leave the EU.
For the purposes of this debate, immigration essentially comes from two areas: the EU and the rest of the world. Currently, almost half of all immigration into the UK comes from the EU. This figure has risen in recent years, while the rate of immigration from Commonwealth countries and other countries has slowed, and more countries have joined the EU. The UK already sets its own rules for immigration from the rest of the world. so leaving the EU won’t stop this happening, unless the government chooses to further tighten the already strict limitations on immigration.
Regarding the EU, we do not know if leaving the EU will stop immigration. For a European country to trade with the EU, it must allow the free movement of labour – both Norway and Switzerland are out of the EU but trade with it, and they both must allow the free movement of labour. So, assuming we following this agreement, and it is unlikely that the EU will treat the UK any differently, everybody in the EU will still be free to come to the UK to work or visit.
It is possible though that the government will be able to make an agreement with the EU to treat all of the EU as it currently treats the rest of the world. However, as mentioned already, that has to be negotiated and the EU will fight against this idea on the grounds that it is unfair – if we want to trade with Europe, we need to abide by their rules.
Most EU citizens who come to the UK do so for work. Many do low paid, unskilled jobs for long hours, such as factory work, farm labour – many small businesses and farms rely on cheap immigrant labour to survive. Skilled labour from the EU helps to fill many jobs in the UK where there are insufficient British skilled workers – areas such as finance, NHS, health care and law, for example, often rely on skilled professionals from Europe.
Expats and Retirees In Europe
Of course, EU immigration works both ways. Around 1.3 million Brits live and work in Europe, with many people choosing to retire there, purchasing properties in Spain, Portugal, France, and sometimes in Greece and Italy too. This could come to an abrupt end. It is also unclear if those already retired in Europe would be allowed to stay when the UK fully leaves the EU.
It is likely that British ex-pats will be allowed to stay in their properties in Europe, however, laws surrounding taxes and inheritance may change, and this may make retirement in Europe more expensive, forcing some people to return. On the plus side, the collapse of the pound means that ex-pats who sell up will have more money with which to return to the UK.
It is possible that British workers will start to find it much harder to work in Europe or to set up their own companies.
Students Blocked From Europe
Currently, British students are free to apply to EU universities. This relationship will likely cease. The EU also funds cross border scientific research, and Brexit will see a cut in funding for UK universities. Overall, education will be in a poorer state.
Reduction in British Investment
We have already seen the global markets fall as a result of the Brexit vote. Some British banking and property stock have been hit very hard, with falls of 30-40%, and the pound has also suffered. Why? There are many complex reasons, but one easy one to understand is this: Every global investment bank, fund manager and private investor will balance their investments in different market sectors, and one of these will be Europe.
Now that the UK has voted to leave Europe, many investors will have to sell UK stocks and purchase stocks in alternate European businesses. The market will drop, and this leads to panic selling, as other investors see UK stocks falling and sell their own portfolio in an attempt to cut their losses before the big crash comes. The result is, people keep selling, stocks keep going lower and British businesses lose money.
Brexit already has resulted in over $2 trillion being wiped off global stock markets – this is worse than when Lehman Brothers went bankrupt in 2008, which prompted the global economic crisis, credit crunch and years of austerity. We have only had one day of trading – in fact, the Japanese stock market ceased trading early on Friday to try to stop the markets crashing.
France Has Overtaken Great Britain
On Friday 24th June, so-called “Independence day”, France overtook the UK as the world’s fifth largest economy. the fall in the stock market and decline value of the pound means that France is now richer than the UK. The London Economic tweeted on Friday:
The UK is no longer the world's 5th largest economy. The £ has fallen so far that France has overtaken us. #EUref
— The London Economic (@LondonEconomic) June 24, 2016
UK is Entering Recession
Latest news, Monday 27th June, is that the pound has fallen further and the UK is possibly entering recession. Read more here: https://www.poundsterlinglive.com/usd/5095-pound-to-dollar-exchange-rate-222311
100,000 City Jobs in Danger
In April, The Guardian reported that Brexit could lead to the loss of 100,000 finance jobs in the UK, with many being lost in London. Many people in Essex rely on London’s extremely lucrative banking and finance sector for their employment. Brexit could cause a major problem here.
Many global banks need a centre in Europe, or more specifically, the EU, and may have to relocate to another country. International banks are in London to gain access to the single market, but when the UK leaves Europe, this will no longer be the case. It is expected that Dublin, Paris and Berlin will all benefit from this mass banking migration. Also, Brexit means less investment in London from overseas banks, and therefore there will be a major slowdown in the number of new jobs being created.
The PwC UK report predicts that London won’t recover until around 2030.
End To EU Funding for Essex Businesses
Many businesses in Essex, especially small farms, benefit from EU funding. This funding will be cut off once we leave the EU, and in times of austerity, it is not clear if the UK government will provide the same funding.
In 2015, Essex County Council helped Essex businesses to access £380 million in EU funding, which was to be available until 2020.
Many public services also benefit from EU funding. Funds from the European Social Fund will also come to an end – these funds help prepare unemployed people between the ages of 19-65 for work. Organisations such as Ixion receive funding from the EU.
No More Silly European Laws and Regulations!
Another concern often quoted was that Europe enforces many rules and laws on the UK, which disrupts trade and business in general. By leaving Europe, we can ignore all those rules and laws! Well, this may also be a false assumption.
Many of the laws and regulations in Europe are centered around health & safety and fair trade. If a UK manufacture wishes to sell to an EU country, it will still have to ensure that products abide by EU health & safety regulations, otherwise nobody will buy the products. If you have ever imported goods from the Far East to the UK for re-sell, you will note that often the goods are EU compliant. Just as Chinese and Thai manufacturers have to ensure that goods comply with EU laws, the UK will too.
Another concern is import duty. It may become more expensive for UK businesses to import goods from Europe, and this can seriously hit profit margins. Again, this still needs to be negotiated between the UK and the EU. More on this on The Guardian.
The UK Must Still Abide By European Rules
The UK, and businesses in Essex, must still abide by EU rules if it wishes to trade with EU countries. However, Great Britain has lost its influence in Europe and gone from being an EU member with special status, a power of veto, and a high commissioner in charge of the EU’s finance policy, to being a begger at the door who, in exchange for trading rights, will have to agree to rules they have no say in.
The Future is Uncertain
At the moment, nothing is clear. The world markets are in turmoil, UK politics is in crisis with resignations and internal conflict, the pound has crashed and may fall further as more international investors sell off their UK investments and put their money back into EU. City analysts have suggested that the economy won’t recover until 2030. The short-term prognosis is poor – Great Britain is weaker, poorer and less influential in the global market. The Leave campaigners have won the election, but it may be a long time before they win the country back.
How Does Brexit Affect Your Business?
Have you benefited from EU funding? Have you already lost trade deals with EU countries? Let us know how Brexit is impacting your business by commenting below.