What Is Brexodus?
Brexodus, a compound of "Brexit" and "exodus," refers to the prediction made by some observers that the United Kingdom's exit from the European Union (EU) will coincide with 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 rights of EU and U.K. citizens that have already swapped countries should largely be protected by law, although the repercussions of a "hard Brexit" may encourage them to leave anyway.
- Lots of U.K.-based companies plan to set up shop elsewhere, mindful that leaving the EU without a deal could have a devastating impact on their ability to do business.
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 complete 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. Most negotiators on both sides are keen to avoid Britain leaving without a deal in place, otherwise known as a "hard Brexit," but have so far been unable to come to an arrangement that satisfies all parties. Amid all this chaos, the deadline has already been extended twice and is widely expected to be prolonged for a third time before Oct. 31, 2019—the current date that Article 50 is set to expire.
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.
Delays, infighting between politicians, and threats of a "hard Brexit" have left EU nationals living in the U.K., British nationals residing in the EU, and corporations that do business across the English channel feeling anxious.
Some assurances have been made by politicians on both sides of the channel. However, as of yet, nothing is set in stone, leaving millions of people in the dark about their future rights to abode in the country they live in and thousands of companies unsure as to whether they will be able to trade the same way as before or under less favorable World Trade Organization (WTO) rules.
Types of Brexodus
Europeans living in Britain worry about their status, particularly as immigration is a politically fraught issue in the United Kingdom. The uncertainty surrounding Brexit led 47% of highly skilled EU workers to tell Deloitte in June 2017 that they were considering leaving the country within five years. The majority, 52% of respondents, also complained that their employers had failed to communicate with them effectively the implications of Britain's departure from the EU.
According to U.K government statistics, roughly 3.7 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.
To date, threats of leaving have largely been just talk—research shows that more EU citizens are arriving in the U.K. than departing. However, it looks almost certain that such movement will grind to a halt once Brexit finally happens, regardless of whether a deal is reached or not.
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 divorce and their job prospects—a no-deal Brexit is expected to see many big employers relocate and potentially trigger a recession.
Amid all these question marks, there appears to be one almost clear certainty: individuals that decide to move across the English Channel once Brexit is complete will likely no longer be free to do so. Some countries value immigration more than others. However, the fact that many U.K. citizens reportedly voted for Brexit to curb freedom of movement suggests that the door will be shut for future generations, or at least those without suitable employment qualifications. If that happens, EU nations will probably strike back with similar measures of their own.
For companies, Brexit is even more complicated. An end to freedom of movement could impact their ability to recruit staff from neighboring countries. Exiting without a deal would also leave corporations in the U.K., including American ones, facing significant barriers to trade their goods and services internationally from the British Isles—new free trade agreements (FTA) would have to be drawn up, which could take years to ratify.
A report by one think tank, the New Financial, said 275 companies in the U.K. have moved or planned to transfer some of their business, staff, assets, or legal entities to the EU. The think tank predicted that company relocations have already cost the city of London at least £900 billion ($1.1 trillion)
Other research is much more pessimistic. In early 2019, the Institute of Directors (IoD) warned that almost one in three businesses located in the U.K. planned to set up shop elsewhere.
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. Other sectors with a lot at stake include automotive, agriculture, food and drink, chemicals, and plastics.