Brexit Stage Left: The Impact of Brexit on Expats
If you’re living anywhere near the European Union (EU) or Britain at the moment, you’re probably aware of the upcoming Brexit referendum (on the 23rd June 2016). This will allow British citizens to vote on whether Britain should exit the EU (otherwise known as “Brexit” or British Exit). If Brexit receives majority support, this will have substantial impacts on anyone looking to move between EU and Britain. We’re going to take you through how this will specifically affect expats in the UK – both those who have moved from and to Britain.
Immigration and Migration
As you’ve likely already guessed, the biggest impact of a potential Brexit for expats is a restriction on movement. Under current rules, those within the EU have the right to live and work in Britain with their existing citizenship. If Britain were to leave the EU, this free movement would be altered. It’s a little difficult to say what the new rules may be, but there are two likely options.
Firstly, it may be that the current free movement rights between the UK and EU may be replaced by an agreement that continues to allow this freedom of movement, irrespective of severance from the EU. This has been the case with other countries, such as the freedom of movement agreement between Switzerland and Norway (despite neither of them technically being part of the EU, but instead being part of the European Free Trade Association). If this were the case, expats and migrants would feel hardly any of the repercussions from Brexit.
Alternatively, Brexit could signal the end of free movement between EU members and the UK. This would heavily restrict both those entering and leaving Britain. Immigration is a hot topic politically, and this may mean that it is heavily restricted in the event of Brexit. As a result, this may be a likely option, as Britain looks to slow its record 330,000 net migration, which many believe is unsustainable.
Obviously this could also alter your ability to work in the UK or the EU. You can find out a little more here on what Brexit could mean for European workers, though keep in mind that the finer details are a little hazy, as they’re yet to be properly considered.
Is there an issue of deportation?
Many people are scared that Brexit may mean that Brits living in the EU will be deported or vice versa. This seems unlikely, for a number of political, economic and practical reasons. It is quite possible that expats will receive some level of “acquired rights” and that new immigration policies will only be applied to new arrivals, following the passing of legislation.
You may also apply for permanent residence in an EU country or the UK if you have lived there for five years or more (should you be eligible; you can apply online via https://www.gov.uk/apply-for-a-uk-residence-card/permanent-residence-card). If you meet this criteria, and intend to stay put, it may be a good idea to apply for this, just to ensure your rights. If you’re concerned at all, it may also pay to contact an immigration specialist to appraise your individual situation.
Trade and Cost of Goods
As it stands, the EU is a single market – meaning that there are no tariffs or restrictions on what can be imported and exported among European countries. If Britain were to exit the EU, the 45% or so of its exports that go to EU may be subject to new found restrictions, making them less competitive in terms of price. This would also impact the price of imports; meaning higher costs may be passed onto the ultimate consumer.
It is possible that the UK may be able to renegotiate these bargains on a case-by-case basis (to read more on EU trade negotiations as documented by Centre of European Reform read this article). On the other hand, the UK would have the power to create their own trade agenda, giving the country more freedom and sovereignty, which is never a bad thing for citizens.
The GBP and other currencies
Despite being part of the EU, the UK has never adopted the Euro (EUR) in the same way other European countries have. Instead, as you’re probably well aware, the UK uses the Pound Sterling (the GBP). Brexit, if it were to happen, looks set to have a negative impact on the GBP compared to the EUR and other currencies, due to traders seeing a slightly more risky and worrying short-term economic outlook for Britain. However, the chairman of UBS (one of Europe’s largest banks) has expressed confidence in the fact that the UK would be able to renegotiate its way into Europe’s single market for goods and services. He does acknowledge that this is a time of uncertainty however, and there are reports that UBS’s analysts are picking for a fall in the currency should Brexit go ahead. Uncertainty is key – this means that there are likely to be large fluctuations in the GBP over the next two or so years, making it a tough call to predict.
If voters were to shut down Brexit in the referendum, the GBP would likely appreciate slightly as financial markets are relieved of this fear and uncertainty.
If you’re an expat, you want to keep these possibilities in mind if you’re looking to move currencies around in the near future. While we can’t tell you exactly what will happen – having an outline of the possibilities is always handy when trying to make a decision.
Overall, whether you’re for or against Brexit, make sure you vote in referendum (assuming you’re eligible) on the 23rd of June. If you’re looking to convert GBP to EUR, OrbitRemit has you covered. You can see our rates by clicking on the calculator (it’s at the top right hand side of the screen).