What Is Brexodus?
Brexodus, a compound of the terms "Brexit" and "exodus," refers to the prediction made by some observers that the United Kingdom's (U.K.) exit from the European Union (EU) will lead to numerous individuals and corporations fleeing the British Isles.
- Brexodus refers to the prediction made by some observers that the U.K.'s exit from the European Union (EU) will coincide with numerous individuals and corporations fleeing the British Isles.
- The U.K. formally separated from the EU as of January 31, 2020.
- The rights of EU and U.K. citizens that have already swapped countries should largely be protected by law.
- Early fears of Brexodus have so far not materialized, and millions of EU citizens and thousands of EU-based businesses have already applied to continue their residence and operations in the post-Brexit U.K.
The U.K. voted to leave the EU in a referendum held on June 23, 2016. The divorce process, known as Brexit, was initially expected to be completed by March 29, 2019, two years after Article 50 was triggered.
In the end, two years proved to be insufficient for European leaders and U.K. politicians to broker the terms of an exit. In October 2019, the U.K. and the EU finally agreed to a revised withdrawal agreement and, as of January 31, 2020, the U.K. officially left the EU. The U.K. remained subject to EU law and a part of the EU single market and customs union through the end of 2020 as the two sides negotiated the transition.
The U.K.'s withdrawal from the EU is likely to have profound effects on individuals and businesses, yet the exact implications remain uncertain despite more than three years passing since the referendum.
The delays, infighting between politicians, and threats of a "hard Brexit" caused substantial anxiety among EU nationals living in the U.K., British nationals residing in the EU, and corporations that do business across the English channel.
During the transition period, the U.K. and the EU negotiated a host of issues, including trade, law enforcement and security, aviation standards, access to fishing, electricity and gas supplies, patent licensing, and regulation of medicines. Some assurances were made by politicians on both sides of the channel. However, the exact arrangements were not set in stone, leaving millions of people in the dark about their future rights to abide in the country they live in. Also, thousands of companies were unsure as to whether they would be able to trade in the same way as before or under less favorable World Trade Organization (WTO) rules.
British Members of the European Parliament formally departed their offices in Brussels, and emigration from the U.K. to the EU hit a 10-year high of an estimated 84,000 in 2019. On the other hand, over 3 million EU citizens applied to stay in the U.K. under the E.U. Settlement scheme, with over 2.7 million approved so far.
Brexodus for Individuals
Europeans living in Britain worry about their status, particularly as immigration is a politically fraught issue in the U.K. According to The Guardian, in 2017, Deloitte found that the uncertainty surrounding Brexit prompted 47% of highly skilled EU workers to consider leaving the country within five years. However, in February 2020, Reuters reported that there were few signs that workers from London's financial district were relocating to Europe. Catherine McGuinness, leader of the City of London, reported that the number of bankers and insurance and asset management workers uprooting to Europe was between 2,000 and 7,000.
According to U.K government statistics, roughly 3.6 million EU nationals live in Britain, the equivalent of about 6% of the population, while 1.3 million U.K.-born citizens reside in the EU, according to UN data.
To date, threats of leaving have largely been just talk—research shows that more EU citizens are arriving in the U.K. than departing.
The rights of EU and U.K. citizens that have already swapped countries should largely be protected by law, despite reports indicating that there has been a huge spike in the number of EU nationals deported from Britain since the referendum. Whether they choose to stay or not will likely hinge on the outcome of the transition and their job prospects—a smooth transition is expected to see most large EU-based employers remain in the U.K. with a potential U.K. recession. The economic downturn has been realized with the added stress of the COVID-19 epidemic.
What is certain is that individuals who decide to cross the English Channel once Brexit is complete will face greater barriers to entry. This will likely especially apply to those without suitable employment qualifications. Britons in the EU will likely face similar difficulties.
Brexodus for Businesses
For companies, Brexit is even more complicated. The end to freedom of movement will impact firms' ability to recruit staff from neighboring countries, and the U.K. is facing significant barriers to international trade.
As of October 2020, financial services firms operating in the U.K. had shifted approximately 7,500 employees and more than 1.2 trillion pounds ($1.6 trillion) of assets to the European Union ahead of Brexit, and more followed, according to Reuters reporting on EY data.
Financial services companies such as banks, insurers, and asset managers are said to be among the most concerned about the impact of Brexit. These firms have used London as a headquarters from which to serve the EU since "passporting" arrangements allow them to operate across the bloc without setting up local subsidiaries. However, In January 2020, the U.K. Financial Conduct Authority reported thousands of applications for EU financial service firms to operate in the U.K. after the final separation. Other sectors with a lot at stake include automotive, agriculture, food and drink, chemicals, and plastics.