Britain after Brexit – brief overview

• Date: 01 April 2018
• Pages: 69-84
• Published date: 01 April 2018
• DOI: https://doi.org/10.1108/JITLP-12-2017-0052
• Author: Suhail Abboushi
• Subject Matter: Strategy,International business,International business law,Economics,International economics,International trade

Britain after Brexit –brief

overview

Suhail Abboushi

School of Business Administration, Duquesne University, Pittsburgh,

Pennsylvania, USA

Abstract

Purpose –This paper aims to examine the early aftermathof Britain’s Referendum to leave the European

Union. The study addressesthree areas: British public opinion and sentimentwith regard to Brexit, Britain’s

economyand outlook, and migration.

Design/methodology/approach –The study is exploratory in nature,examining data and information

available in a variety of public sources that include government statistics, media reports and scholarly

researchfindings.

Findings –Analysis of published data and research studiessuggest growing disenchantment among the

public with regard to Brexit and its consequences, economic and cultural influences on the Referendum,

economicuncertainty and potential deterioration, and oppositionto and moderation in migration.

Research limitations/implications –The study has not generated original survey data about

economicand demographic variables that would make possiblestatistical analysis of hypothesis.

Originality/value –Recent politicaldevelopments in developed Western societiespoint to a rise in popular

dismay with globalization, regional integration and multiculturalism. The present study explores and

identifies some of the reasons for the trend and the potential consequences to breaking up cross-national

alliances as they pertainto the United Kingdom in particular. Similar studiesmay alert policy makers to the

causes andpotential economic and political consequencesof de-globalization.

Keywords Migration, Culture, EU, Trade, GDP, Brexit

Paper type Viewpoint

Introduction

On June 23, 2016, voters in the United Kingdom (UK) voted on the European Union

Membership Referendum, known as Brexit, to determine whether to “remain”or “leave”

the EU. Seventy-two per cent of voters participated, with 51.89 per cent voting to leave

and 48.11 per cent voting to remain. Prime Minister at the time, David Cameron,

resigned and was succeeded by Theresa May who called for general election to be held

in June 2017. The idea of Brexit is not new in Britain and had been debated since 2010

when leaders of one political party or the other began advocating “in/out”referendum

to determine continuing or discontinuing membership in the EU. In 2015, when the

Conservative Party won elections, the Government reiterated commitment to the

Referendum but only after completing negotiation with EU to obtain new and favorable

terms (Strong Leadership, 2015). Careful reading of the Conservative Party’sManifesto

reveals that the party wanted strong changes to EU policies, stronger UK sovereignty,

abandoning EU principle of “ever closer union”(Ross, 2014), stronger national

parliaments and significant changes to EU migration policies. The negotiation

concluded in February 2016 but the outcome offered only modest migration

modifications, and this was cited by the prime minister as a reason for the outcome of

Brexit Referendum (Parker, 2016).

Britain after

Brexit

69

Received30 December 2017

Revised19 February 2018

Accepted20 February 2018

Journalof International Trade

Lawand Policy

Vol.17 No. 1/2, 2018

pp. 69-84

© Emerald Publishing Limited

1477-0024

DOI 10.1108/JITLP-12-2017-0052

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/1477-0024.htm

Campaign and positions

Preparation for the Referendum was organized in two campaigns, the leave campaign

endorsing a vote to leaveand the remain campaign endorsing a vote to remain. In summary,

the leave campaign argued that EU was undemocratic, the membership reduced national

sovereignty, and leavingEU would allow UK to control immigration and reducepressure on

public services, potentially save billions of pounds in EU membership fees, allow UK to

make its own trade deals and free UK from European judiciary. The remain campaign

argued that leaving the EU might jeopardize UK’s prosperity, diminish its international

influence, jeopardize national security, erode trade privileges, erect trade and investment

barriers and cause a possible economic slump affecting employment and investment and

possible UK isolation and diminished worldwide status (EU Vote, 2016). The leave

campaign may have been strengthened by perception among segments of the British

working class who believed that EU membership did not alleviate their sense of economic

inequality that has prevailed in their post-industrial economy and may have even

aggravated it. Studies haveshown that public perception of economic fairness or unfairness

as measured by income distribution significantly affects attitude toward economic

integration (Fattore and Fitzpatrick, 2016). Interestingly, statisticspublished by UK’sOffice

of National Statistics (ONS) show that income inequality in Britain continues to be strong

and has not improved much under EU integration. Using the Gini Coefficient, a commonly

used measure of income inequality, the coefficient forgross disposable income in 2017 was

around 49 per cent, not far from where it was ten years earlier, when the coefficient was

around 51 per cent. Membership in EU doesnot seem to have improved economic equity in

Britain as measured by continued income inequality especially, when British people

compare their lot to that of other EU peoples, for recent Organisation for Economic

Cooperation and Development (OECD) studies show Gini coefficient in Britain is

surprisingly higher than most other EU countries (OECD Income, 2017). From this

perspective, EU membership did not deliver improvement. Post-Brexit media editorials by

leave advocates and their Membersof Parliament (MPs) point to such belief to explain their

and their constituents’decisionto vote leave (Mann, 2017).

Within the Referendum campaign, the political parties had varying positions, some

leaned remain and others leaned leave, as listed in Table I. The Conservative Party had

mixed positions with some supportingremain and others supporting leave. In Gibraltar, the

people and the parties faced challengingdilemma due to UK–Spain dispute over sovereignty

of Gibraltar and the possibility that leaving the EU would place hardship on the island’s

trade with Spain. All parties in Gibraltarsupported remain.

Apart from the political parties, people vote in the four nations of UK showed that

England voted for Brexit by 53.4 per cent, Wales voted for Brexit by a margin of 52.5

per cent (unlike the Party of Wales), Scotland voted remain by 62 per cent and Northern

Ireland voted remain by a margin of 55.8per cent. With regard to preference of the business

community, representatives of major British corporations weighed in on the debate and

most were concerned about the impact Brexit would have on future operations. Survey of

UK businesses showed a strong preferencefor remain, though medium and small companies

were more evenly divided depending on the scope of their operationsbeing local, regional or

global (Farell, 2016). The banking, finance and law industries were outspoken in favor of

remain and expressed skepticism as to whether the City of London would maintain its

enviable status as market leader in global finance. Post-Referendum survey by the

Confederation of British Industry confirms the finance industry’s fear and point to the fact

that this industry is more gloomy about the future than it was in 2008 at the height of the

global financial crisis. Ninety per cent of firms in that industry view Brexit as the biggest

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