Legislation – A vast majority of UK law is derived from the EU, estimated at 80% of law currently in force in the UK. As such, withdrawal from the EU will have a huge effect on legislation applied in the UK. – The Treaties (the TEU and the TFEU) would cease to apply, including as part of those, the fundamental freedoms (free movement of goods, services, capital and persons/workers) meaning that the protection of UK citizens either living in or intending to move to an EU Member State will disappear. UK nationals will require visas just to visit any MS and stringent requirements will apply to workers visas.
Such rights, which derive from fundamental freedoms and are directly enforceable in UK courts, will be deprived to nationals of other Member States residing in the UK. – Treaties, Regulations and Decisions (the latter explicitly addressed to the UK or UK party) are directly applicable, i. e. they are automatically legally binding without the need to implement such provisions into national law. All of this legislation currently in force will automatically become inapplicable in the UK and any rights derived will cease to exist.
This will leave huge gaps in the UK legal system. For example, the Regulation on compensation to passengers for delayed or cancelled flights will no longer apply. Likewise, competition law regulations such as the vertical agreements block exemption, which exempts thousands of common commercial agreements from UK competition law enforcement, will no longer apply. Identifying such national legislative measures which are affected by Regulations or Decisions (as these are not explicitly given effect into national legislation) and revising them, would be a daunting task.
– National legislation adopted to comply with EU Directives could be ‘potentially’ repealed or amended – whichever option would be more beneficial to the UK. However, given the large number of such measures and the way in which the UK has implemented EU Directive, identifying and assessing the benefit and risks of keeping those provisions will prove a mammoth exercise. One area that would be revised as priority 1 will most certainly be Financial Regulation (Banking and Credit institutions) and possibly Company law (mergers and acquisitions).
However, this exercise will take years owing to the numerous areas where the EU has legislated to date. Amendment of existing legislation and adoption of new measures would add significantly to the workload of UK Departments and Parliament. – The effectiveness of judicial rulings (case law) which were decided following a preliminary reference procedure, used when a UK court or tribunal refers a question of EU law to the Court of Justice of the EU for a preliminary ruling, would also need to be revisited. Free movement of persons and immigration
– The EU law on free movement of persons allows EU citizens (and their families) to travel to, reside in and exit other EU countries with limited administrative formalities, providing that they meet certain conditions. For residence beyond three months this requires a person to be working, self-employed, self-sufficient or studying in the host member state. As a result of a number of agreements, the right of free movement of persons has been extended in the UK to nationals of EEA states and Switzerland. – Many thousands of businesses and individuals have taken advantage of the right of free movement of persons.
Some estimates put the current number of British citizens living in Spain at 750,000. Thousands of EEA nationals and their family members live and work in the UK, and are employed at all levels in UK businesses. – Were the UK to withdraw from the EU, the right of freedom of movement would fall away. This could have significant effects on individuals and businesses concerned: both for those who were intending to exercise their right to move to other EU states and for those who already have. The latter would depend on (i) any transitional measures put in place here and in other EU states, and (ii) whether persons had already acquired rights, e.
g. if they had acquired permanent residence under the Citizens Directive (2004/38/EC). – Were the right of free movement to fall away completely, the UK would be free to impose its own domestic immigration law on citizens of other EU states (assuming that the UK Regulations which give effect to the relevant Directive are revoked), and vice versa. – The UK’s restricted ability to limit the inward migration of persons from other EU states has become controversial in some quarters, particularly since the accession to the EU of two tranches of east European countries in 2004 and 2007.
– However, the ‘worst case scenario’ consequences of the UK pulling-out could include the repatriation of thousands of UK citizens if they did not meet immigration requirements of the EU state in which they are currently living, and potentially the requirement for UK nationals to obtain a visa when going on holiday to other EU states. The effects on UK business would be significant, both on their ability to do business in and transfer people to other EU states, but also in relation to their own workforce, particularly given the current limits on non-EU economic migration.
Financial accounts between the UK and the EU – The Structural and Cohesion Funds are the EU’s main financial instruments for supporting social and economic restructuring across the EU. They account for over one third of the EU budget and are used to tackle regional disparities and support regional development through actions including developing infrastructure and telecommunications, developing human resources and supporting research and development.
– The main Structural Funds available are the European Regional Development Funds (ERDF), which promotes economic and social cohesion through the reduction of imbalances between regions or social groups; and the European Social Fund (ESF) which prevents unemployment, develops human resources and promotes integration into the labour market. For the period 2007-2013, the UK received €9. 4 billion in Structural Funding. Each UK region has an allocation of that money to fund projects. Allocations are based on regional employment and skills needs and are matched with a similar amount of national funding.
Many regions and organisations, such as higher education institutions, use such structural findings, in order to establish various projects which are beneficial for UK regions, people or institutions. Depriving the UK from such structural cohesion funds, would lower the quality of life for many British people. – The money used by the Bank of England to fund the European Central Bank (ECB) may need to be returned; and any kind of open financial accounts, planned on the basis of continuing UK membership, would need to be negotiated and settled.
Air travel – If the UK did withdraw from the EU, air travel as we know it would change overnight. The immediate loss of passenger rights to compensation for delayed or cancelled flights has already been mentioned. Another impact would be on the airlines flying to and from the UK. For example, Ryanair, as an Irish airline, has the right to fly between any EU airport. If the UK withdraws from the EU, Ryanair would only be permitted to fly from the UK to the Republic of Ireland.
We do not know if the UK would secure a ‘good deal’ in terms of interaction with the EU such as Switzerland or other neighbor countries have in many respects. At EU institutional level Disentangling from the EU institutional framework will see thousands of UK nationals currently working for the EU institutions being made unemployed and likely returning to the UK. Those will need to be absorbed by the local labour market (except the few that may reinsert themselves in any other EU MS as third country nationals). In addition, the proportional share of the UK in the European Central Bank will need to be reimbursed.
No further aid in the form of Cohesion Funds will be received by poor areas of the UK, with the economic situation in those areas likely to worsen relative to more wealthy areas of the UK. Trade repercussions Within the international trade field, the UK would cease to be covered by thousands of bilateral or multilateral agreements signed by the EU and, as a result, to benefit from those. As a result, new agreements would need to be negotiated with the EU and with any other country such as China, Japan, other ACP countries or Brazil. Negotiations would be complex, lengthy and costly. Basic goods and their prices.
Due to the non participation in the Agricultural or Fisheries policies, in case of shortage of those products in the UK (a likely occurrence given current production and consumption rates), the prices of those goods will rise considerably as custom duties will need to be paid on products imported into the UK from the EU. Similarly prices may rise if UK does not negotiate good deals with ACP countries or other producers of imported food-related products. Conclusion Many aspects of the effective situation we may experience if the withdrawal were to occur remain unknown or are speculations at best.
However, the examples mentioned above are quasi certainties. It all may depend on the skills of the negotiators [if an agreement were to be reached] and the potential mutual benefits that would be derived from a new relationship. Of course, the UK may be able to secure a good deal. Alternatively, the UK may not but over time find a way to leverage its new status. More likely, than any of this is that the EU further evolves and the UK, and other nation-states, continue their association but may redefine the relationship in certain ways.