Territorial disputes: Brexit (21) [Post 221]

A research paper published just days ago by London School of Economics and Political sciences (LSE) explores the potential consequences of the 2016 referendum and Brexit for public services, inequalities and social rights. A summary of its contents below.

What does Brexit mean for social policy in the UK? 

“The paper explores the consequences of Brexit understood in two ways – as the referendum result itself and as the eventual outcome of negotiations over the exit process and shape of future relations with Europe. Regardless of where the process ends up, the result changed British politics. The evidence the vote presented of deep disaffection with the status quo, the change of administration, and the time and resources focused on withdrawal negotiations and scenario planning have all had ongoing implications for social policymaking.” 

“In terms of the eventual outcome, huge uncertainty remains and may well continue for years to come. Against this backdrop, the paper maps out the implications of likely alternatives, including a central scenario in which the UK leaves the single market and brings an end to the free movement of workers.” 

The “conclusion is that Brexit poses major risks to social policy, and that these risks are larger the more distant the UK’s future relationship with the EU. Social policy has been affected by the UK’s membership of the EU in multiple ways – and hence will be deeply unsettled by leaving.” 

“There is a strong consensus that economic growth will be negatively affected in the medium – term, particularly under ‘harder’ Brexit scenarios, and that this in turn will affect many of the areas covered in this paper. Slower growth will mean lower living standards and al so less money for public services – the opposite of a ‘Brexit dividend’. It may result in downward pressure on workers’ rights as the UK tries to find new ways to invite investment and boost employment, and once we are no longer subject to the EU’s Charter of Fundamental Rights. And a weaker economy will make the UK a less attractive place for the migrant worker s we are likely to continue to need to keep our public services running.”

“Concerns about immigration were interpreted as being one of the drivers of the referendum result, and ending the free movement of workers became a red line for the May administration early on. But a fall in EU migration also looks likely to have significant negative consequences for social policy. EU migrants play an important role in the delivery of health and social care and in housing construction, so reduced migration will make it more difficult – and more expensive – to provide these services. The consequences for service delivery are likely to be much greater than any reduction in service demand: EU migrants do use public services like health and social housing, but no more (indeed if anything rather less) than UK – born citizens. And overall, they pay more into the exchequer in taxes than they take out in benefits and services, so reduced migration will also have a negative effect on public finances. Further, there are unlikely to be major compensatory consequence s for the wages of UK – born workers as a result of reduced competition. S mall negative effect s of EU expansion on the wages of some lower – paid workers in the UK have been identified. But these are estimated to have had a smaller impact on living standards over the course o f a decade than the inflation caused by currency depreciation has had in the two years since the referendum.”

Link to the complete document

Monday 11th March 2019 

Jorge Emilio Núñez

Twitter: @London1701

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