Predicted impact of Brexit

The UK–Ireland border crosses this road at Killeen (near Newry), marked only by a speed limit in km/h. (Northern Ireland uses mph.)

The United Kingdom and Republic of Ireland have been part of the Common Travel Area since before the EU was formed. This allows their citizens freedom of movement within the area. Their membership of the EU Customs Union and Single Market means there are no customs checks or tariffs. Since 2005, the border has been essentially invisible.[10]

After Brexit, the border between Northern Ireland (part of the UK) and the Republic of Ireland (part of the EU) became the only UK–EU land border. There was concern over this becoming a "hard border" with fewer, controlled crossing points and customs checks.[11] This could have compromised the Good Friday Agreement that ended the Northern Ireland conflict,[12][13][14] and lead to violence.[15] All involved parties agreed a hard border should be avoided.[16] To forestall this, the EU proposed a "backstop agreement" that would have kept the UK in the Customs Union and kept Northern Ireland in some aspects of the Single Market also, until a lasting solution was found.[17] The backstop was supported by the Irish government and many Irish nationalists, but opposed by the Democratic Unionist Party as weakening Northern Ireland's place within the United Kingdom and is regarded as the main reason why Theresa May's withdrawal agreement was never approved by the British Parliament.[18] The UK Parliament had already rejected an earlier proposal.

After becoming Prime Minister on 24 July 2019, Boris Johnson promised to remove the backstop from the withdrawal agreement and replace it with "alternative arrangements".[19] After further negotiations in autumn of 2019, an alternative model, the Ireland/Northern Ireland Protocol of the final Brexit withdrawal agreement was agreed between the UK and the EU.

If there were a no-deal Brexit, the UK government announced that it would not have performed customs checks at the Irish border and acknowledged that might have presented a smuggling risk.[20][21] European Commission President, Jean-Claude Juncker, said if there was a no-deal Brexit the Republic of Ireland would have had to implement border checks on the EU's behalf.[22] In 2019, the President of Ireland signed into law the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act, to help deal with challenges a no-deal Brexit posed to the Republic and its citizens.[23][24][25]

According to data published by Ireland's Central Statistics Office goods exports from Great Britain to Ireland have dropped by 20% since the United Kingdom left the single market. Meanwhile, exports to Great Britain increased by 20% in the same period.[26]

Cars crossing into Gibraltar clearing customs formalities. Gibraltar is outside the customs union, VAT area, and Schengen Zone.

Gibraltar, a British Overseas Territory, participated in the referendum and left the EU together with the UK, although 96% of those who participated in the referendum in Gibraltar voted to remain. Gibraltar is outside the EU Customs Union and Schengen Zone, meaning it has customs and identity checks at its border with Spain.

Spain asserts a territorial claim on Gibraltar. After the referendum, Spain's Foreign Minister renewed calls for joint Spanish–British control.[27] This was rebuffed by Gibraltar's Chief Minister,[28] and the UK government states it would only negotiate on Gibraltar's sovereignty with the consent of its people.[29]

The European Council's guidelines for withdrawal negotiations stated that UK–EU agreements made after Brexit would not apply to Gibraltar without Spain's consent.[30] Gibraltarian government minister (and former Chief Minister) Joe Bossano condemned the EU's attitude, suggesting that Spain was being offered a veto, adding "It's enough to convert me from a supporter of the European Union into a Brexiteer".[31]

In late 2018, the British and Spanish governments agreed that any dispute over Gibraltar would not affect Brexit negotiations,[32] and the British government agreed that UK–EU treaties made after Brexit would not automatically apply to Gibraltar.[33] Spanish Prime Minister Pedro Sánchez said that "With Brexit we all lose, especially the United Kingdom, but when it comes to Gibraltar, Spain wins."[34][35]

First Minister of Scotland Nicola Sturgeon addresses journalists over Brexit and Scotland's place within Europe at Bute House.

After the Brexit referendum, the Scottish Government – led by the Scottish National Party (SNP) – planned another independence referendum because Scotland voted to remain in the EU while England and Wales voted to leave.[36] It had suggested this before the Brexit referendum.[37] The First Minister of Scotland, Nicola Sturgeon, requested a referendum be held before the UK's withdrawal,[38] but the British Prime Minister rejected this timing, but not the referendum itself.[39] At the referendum in 2014, 55% of voters had decided to remain in the UK, but the referendum on Britain's withdrawal from the EU was held in 2016, with 62% of Scottish voters against it. In March 2017, the Scottish Parliament voted in favour of holding another independence referendum. Sturgeon called for a "phased return" of an independent Scotland back to the EU.[40] In 2017, if Northern Ireland remained associated with the EU – for example, by remaining in the Customs Union, some analysts argued Scotland would also insist on special treatment.[41] However, in the event, the only part of the United Kingdom which received unique treatment was Northern Ireland.[42]

On 21 March 2018, the Scottish Parliament passed the Scottish Continuity Bill.[43] This was passed due to stalling negotiations between the Scottish Government and the British Government on where powers within devolved policy areas should lie after Brexit. The Act allowed for all devolved policy areas to remain within the remit of the Scottish Parliament and reduces the executive power upon exit day that the UK Withdrawal Bill provides for Ministers of the Crown.[44] The bill was referred to the UK Supreme Court, which found that it could not come into force as the European Union (Withdrawal) Act 2018, which received royal assent between the Scottish Parliament passing its bill and the Supreme Court's judgement, designated itself under schedule 4 of the Scotland Act 1998 as unamendable by the Scottish Parliament.[45] The bill has therefore not received royal assent.[46]

The French and British governments say they remain committed to the Le Touquet Agreement, which lets UK border checks be completed in France, and vice versa (juxtaposed controls).[47] The two governments signed the Sandhurst Treaty in January 2018, which will shorten the time taken to process migrants attempting to reach the UK from Calais, from six months to one month. The UK also announced it will invest a further £44.5 million on border security at the English Channel.[47]

If there had been a "no-deal" Brexit, trade between the UK and France would have defaulted to World Trade Organization rules. To ensure the smooth flow of freight, France created a new "smart border" which will scan trucks' licence plates and automatically link them to shipping documents filled out online by exporters. Trucks travelling to Britain will either be waved through, or undergo checks if they carry food, plants or livestock. Gérald Darmanin, French Minister of Public Action and Accounts, said there would not be long queues in Calais.[48] France is spending €50 million on expanding port infrastructure and plans to recruit 700 more customs staff by the end of 2020.[49]

The first holidays after Brexit and covid crisis delays occur in Dover port.[50] With Brexit rules, all passport need to be checked. In 2022, queue at the border risk to become the new normal.[51] However, French PM considers France is not responsible for Brexit queue at the border,[52] while Port of Dover boss Doug Bannister has told LBC that it's "absolutely true" that Brexit is ultimately to blame for the extreme delays at the port of Dover because passports require extra checks.[53]

Dover port is three time smaller than Calais port.[50] Brexit will also require a major Dover upgrade, and involve increased queue when biometric checks start.[51]

In mid-2020, the UK announced plans to spend £705m to shore up UK borders in light of Brexit. This includes £235m for new staffing and IT systems, and £470m for port and inland infrastructure.[54]

The Freight Transport Association's UK policy director Elizabeth de Jong stated that a "make do and mend" approach will be necessary while waiting for the necessary trade-related infrastructure to be built. This "mending" process is not expected to be complete until 2025, and will be inherently costly.[55]

At the end of the transition period, Michael Gove suggests that all EU imports will be subject to inevitable border checks, constituting a significant change. Such checks would involve customs declarations, mandatory safety and security certificates, and physical checks of food and goods of animal origin.[55]

A related consequence of Brexit is that deferred VAT payments no longer exist.[55]

According to one study, the referendum result had pushed up UK inflation by 1.7 percentage points in 2017, leading to an annual cost of £404 for the average British household.[69] Subsequent data shows that the Brexit referendum pushed up UK inflation by 2.9%, which amounts to annual costs of £870 for the average UK household.[70] Studies published in 2018, estimated that the economic costs of the Brexit vote were 2.1% of GDP,[71][72] or 2.5% of GDP.[73] According to a December 2017 Financial Times analysis, the Brexit referendum results had reduced national British income by between 0.6% and 1.3%.[74] A 2018 analysis by Stanford University and Nottingham University economists estimated that uncertainty around Brexit reduced investment by businesses by approximately 6 percentage points and caused an employment reduction of 1.5 percentage points.[75] A number of studies found that Brexit-induced uncertainty about the UK's future trade policy reduced British international trade from June 2016 onwards.[76][77][78][79][80] A 2019 analysis found that British firms substantially increased offshoring to the European Union after the Brexit referendum, whereas European firms reduced new investments in the UK.[81][82]

In January 2021 British firms halted exports to the European Union: this resulted in between 2/3 and 3/4 of maritime HGV coming from the EU to return empty to the EU, while maritime British export were reduced by 68% compared to January 2020.[83]

There is overwhelming or near-unanimous agreement among economists that leaving the European Union will adversely affect the British economy in the medium- and long-term.[lower-alpha 2][68] Surveys of economists in 2016 showed overwhelming agreement that Brexit would likely reduce the UK's real per-capita income level.[59][60][61] 2019 and 2017 surveys of existing academic research found that the credible estimates ranged between GDP losses of 1.2–4.5% for the UK,[68] and a cost of between 1–10% of the UK's income per capita.[57] These estimates differ depending on whether the UK exits the EU with a hard Brexit or soft Brexit.[57] In January 2018, the UK government's own Brexit analysis was leaked; it showed that UK economic growth would be stunted by 2–8% in total over the 15 years following Brexit, the amount depending on the leave scenario.[84][85]

According to most economists, EU membership has a strong positive effect on trade and as a result the UK's trade would be worse off if it left the EU.[86][87][88][89] According to a study by University of Cambridge economists, under a "hard Brexit" whereby the UK reverts to WTO rules, one-third of UK exports to the EU would be tariff-free, one-quarter would face high trade barriers and other exports risk tariffs in the range of 1–10%.[90] A 2017 study found that "almost all UK regions are systematically more vulnerable to Brexit than regions in any other country."[91] A 2017 study examining the economic impact of Brexit-induced reductions in migration" found that there would likely be "a significant negative impact on UK GDP per capita (and GDP), with marginal positive impacts on wages in the low-skill service sector."[57][92] It is unclear how changes in trade and foreign investment will interact with immigration, but these changes are likely to be important.[57]

With Brexit, the EU would lose its second-largest economy, the country with the third-largest population and "the financial capital of the world", as the German newspaper Münchner Merkur put it.[93] Population is reduced from 513 million (EU-28) to 447 million (EU-27_2020). GDP is down from 15.9 trillion (EU-28) to 13.5 trillion (EU-27_2020) ; GDP per capita changes from 31,000 (EU-28) to 30,000 (EU-27_2020). Furthermore, the EU would lose its second-largest net contributor to the EU budget (2015: Germany €14.3 billion, United Kingdom €11.5 billion, France €5.5 billion).[94] Thus, the departure of Britain would result in an additional financial burden for the remaining net contributors, unless the budget is reduced accordingly: Germany, for example, would have to pay an additional €4.5 billion for 2019 and again for 2020; in addition, the UK would no longer be a shareholder in the European Investment Bank, in which only EU members can participate. Britain's share amounts to 16%, €39.2 billion (2013), which Britain would withdraw unless there is an EU treaty change.[95]

All the remaining EU members (as well as Switzerland, Norway and Iceland) will also likely experience adverse effects (albeit smaller effects than the UK), in particular Ireland, the Netherlands and Belgium.[96][97][98]

Short-term macroeconomic forecasts by the Bank of England and other banks of what would happen immediately after the Brexit referendum were too pessimistic.[99] The assessments assumed that the referendum results would create greater uncertainty in markets and reduce consumer confidence more than it did.[99] A number of economists noted that short-term macroeconomic forecasts are generally considered unreliable and that they are something that academic economists do not do, unlike banks.[57][99][100][101] Economists have compared short-term economic forecasts to weather forecasts whereas the long-term economic forecasts are akin to climate forecasts: the methodologies used in long-term forecasts are "well-established and robust".[57][99][100][102]

Studies on the economic impact that different forms of Brexit will have on different parts of the country indicate that Brexit will exacerbate regional economic inequality in the UK, as already struggling regions will be hardest hit by Brexit.[103]

Economists have warned that London's future as an international financial centre depends on whether the UK will obtain passporting rights for British banks from the European Union. If banks located in the UK cannot obtain passporting rights, they have strong incentives to relocate to financial centres within the EU.[104][105] According to John Armour, Professor of Law and Finance at Oxford University, "a 'soft' Brexit, whereby the UK leaves the EU but remains in the single market, would be a lower-risk option for the British financial industry than other Brexit options, because it would enable financial services firms to continue to rely on regulatory passporting rights."[105] Goldman Sachs and Morgan Stanley are among the financial firms that have moved some of their business away from the UK to Europe to avoid disruptions anticipated by Brexit.[106][107][108]

Analyses indicate that the departure of the relatively economically liberal UK will reduce the ability of remaining economically liberal countries to block measures in the Council of the EU.[110][111] According to the Lisbon Treaty (2009), decisions of the Council are made by qualified majority voting, which means that a majority view can be blocked should at least four members of the Council, representing at least 35% of the population of the Union, choose to do so. In many policy votes, Britain, allied with other northern EU allies (Germany, Ireland, the Netherlands, and the Scandinavian and the Baltic states), had a blocking minority of 35%.[112][113]

The UK's 73 seats in the European Parliament became vacant upon its withdrawal in 2020. 27 of these seats were redistributed to other countries, with the remaining 46 reserved for potential new member states, reducing the overall number of MEPs from 751 to 705.[114] UK MEPs retained full rights to participate in the European Parliament until withdrawal, though there were discussions about excluding UK MEPs from key committee positions.[115]

In April 2017, a group of European lawmakers discussed what should be done about the vacated seats when the UK leaves the EU. One plan, supported by Gianni Pittella and Emmanuel Macron, was to replace the 73 seats with a pan-European constituency list; other options which were considered include dropping the British seats without replacement, and reassigning some or all of the existing seats from other countries to reduce inequality of representation.[116][117]

There was a political shift in the European Parliament, with 8 more seats for the right: 5 for the right wing PPE and 3 from the far right ID, and 13 seats less for the left: 6 less for the Greens, 6 less for the S&D, and one less for the GUE/GNL. The Greens become a group smaller than the far right.[118]

The European Parliament constituencies in the United Kingdom disappeared after Brexit.

Brexit requires the offices and staff of the European Medicines Agency and European Banking Authority, previously based in London, to move out of the UK.[119][120] The agencies, which together employ more than 1,000 people, are currently located in Amsterdam and Paris.

Currently, EEA sportspersons face minimal bureaucracy when playing in the UK. After Brexit, any EU citizen wanting to do so could be required to hold a work permit. Such work permits can be tricky to obtain, especially for young or lower ranked players. Conversely, British nationals playing in EEA states may encounter similar obstacles where none exist today.[167][168]

It has been computed that with Brexit, people like N'Golo Kanté or Riyad Mahrez would not have qualified to work in England or Wales. The same occurs with those under 18, such as Cesc Fàbregas or Paul Pogba when they signed for their respective English clubs.[169]

An agreement will be need to be reached on how regulations might change after Brexit when UK will no longer be a member of the Espace économique européen.[169]

Since the Withdrawal Agreement came into force on 1 February 2020, British nationals "no longer enjoy the status of citizen of the Union, nor, more specifically the right to vote and to stand as a candidate in municipal elections in their Member State of residence, including where they are also deprived, by virtue of the law of the State of which they are nationals, of the right to vote in elections held by that State." "This is an automatic consequence of the sole sovereign decision taken by the United Kingdom to withdraw from the European Union," according to the treaties and confirmed by the ECJ ruling.[175]

By leaving the EU, the UK would leave the European Common Aviation Area (ECAA), a single market in commercial air travel.[176] The UK will negotiate a future relationship with the EU on the "basis of equivalence of traffic rights and a level playing field".[177] It could negotiate to re-join as a non-EU member (like Bosnia and Herzegovina), negotiate access through a bilateral agreement (like Switzerland), or negotiate a new 'open skies' bilateral deal with the EU.[176] If there is a "no-deal" Brexit, UK airlines will still have permission to operate within the EU with no restrictions, and vice versa. UK airlines licensed before Brexit will still have permission to operate provided they are majority owned and effectively controlled by nationals of the UK and/or nationals of the EU and EEA.[177]

The UK government seeks continued participation in the European Aviation Safety Agency (EASA). Otherwise, the UK's Civil Aviation Authority would take on the role of regulator for UK airlines. A substantial increase in CAA staff and resources would be needed to meet the demands of its new role.[176]

The UK has its own air service agreements with 111 countries, which permit flights to-and-from the country, and these will continue after Brexit. It has air service agreements with a further 17 countries through its EU membership, and it has sought to replace these.[178] By July 2019, the UK had concluded air service agreements with the United States,[179] Canada[179] Switzerland,[180] Albania, Georgia, Iceland, Israel, Jordan, Kosovo, Moldova, Montenegro, Morocco, North Macedonia and Norway.[181]

Three British airlines, Monarch, Flybmi and Thomas Cook, went bankrupt in the period 2017–2019; all three bankruptcies have been partially attributed to Brexit, more specifically the political uncertainty of the Brexit process and the falling exchange rates of the Pound sterling.[182][183][184]

The EU announced that the Channel Tunnel rail link would remain open on current terms for three months if there had been a "no-deal" Brexit. The EU Commission said this should be enough time for new permanent arrangements to be agreed.[185]

After the UK withdrew from the EU, only a registration plate featuring the Union Jack flag and the country code UK satisfies the Vienna Convention on Road Traffic as those registration plates display the international vehicle registration code for the country of registration (UK) incorporated into the vehicle registration plate, and is supplemented with a flag or emblem of the national state. Until the UK withdrew from the EU, the EU format was also valid within countries party to the Vienna Convention of Road Traffic as it displayed the country code supplemented with the symbol of the regional economic integration organisation (EU stars) the country belongs. The EU format was still valid within the EU during the transition period which ended on 31 December 2020. The rules now vary from country to country. In Spain, Cyprus and Malta, an oval sticker is also needed. In other EU countries a registration plate displaying UK and the Union Jack (but not a different flag) is sufficient.[186] Prior to 28 September 2021 the UK's identifier was "GB".[187]

While the UK no longer benefits from EU road traffic policy, the UK entered or remains a member of other treaties which provide some kinds of transport facility.

The Vienna Convention on Road Traffic is recorded by the UN, not the EU, allowing road traffic between the UK and EU member states member of that convention.

EU law continued to apply to the UK during the transition period and UK driving licences were valid in the EU, and EU driving licences were valid in the UK, until 31 December 2020.

From 1 January 2021, UK driving licence holders are still able to use their driving licence to drive in the EU for short visits, although with some exceptions.[186][188] Where the exceptions apply, International Driving Permits, governed by treaties such as the 1949 Geneva Convention on Road Traffic and the 1968 Vienna Convention on Road Traffic, facilitate driving between the UK and the EU/EEA countries. Depending on which convention the country in question has ratified, an IDP governed by the 1949 Geneva Convention might be required in some EEA countries, and an IDP governed by the 1968 Vienna Convention in other EEA countries.[186]

From 1 January 2021, UK driving licenses are no longer European driving licences, so that UK driving license holders now require an IDP to drive in those non-EU/EEA countries which recognise European, but not UK, driving licences. So an IDP is required to drive in several countries in Europe (e.g. a 1949 IDP in Andorra, and a 1968 IDP in Albania, Monaco and Turkey).[189]

When no driving license agreement exists, British drivers lose their driving licences.[190]

The UK was in the European Common Transit Convention (CTC) as an EU member and has negotiated continuous membership after Brexit.[191] This would apply to any new trading relationship with the EU.[192] The CTC applies to moving goods between the EU member states, the EFTA countries (Iceland, Norway, Liechtenstein and Switzerland) as well as Turkey, Macedonia and Serbia. The CTC, with its supplementary Convention on the Simplification of Formalities in the Trade of Goods, reduces administrative burdens on traders by removing the need for additional import/export declarations when transiting customs territories, and provides cash flow benefits by allowing the movement of goods across a customs territory without the payment of duties until the final destination.[193]

Under the EU–UK Trade and Cooperation Agreement (TCA) mutual market access for the transport of goods is limited to point-to-point crossborder transports, with up to two extra movements (cabotage) in the other party's territory permitted.[194]

Except in Ireland, mutual market access for passenger transport is limited under the TCA to point-to-point crossborder transports.[146] Bus services on the island of Ireland can continue to pick up and set down passengers in both Ireland and Northern Ireland.[195]

From 1 January 2021, drivers taking their own cars to the EU or EEA now need a green card issued under the International Motor Insurance Card System to prove that their cars are insured. Trailers and caravans need separate green cards.[186]

Ferries continue with obstacles such as customs checks:[196] To avoid such an issue, new ferry departures between the Republic of Ireland and the European mainland have been established.[196]