Relations between the United Kingdom and Europe refer to a turbulent history. The British refused to participate in the negotiations that led to the creation of the EEC in 1957. Then the accession file was blocked by General de Gaulle who considered that the arrival of the English would be a factor of disorder. Finally the United Kingdom joined the Community in 1973 – after the death of General de Gaulle – under the leadership of Conservative Prime Minister Edward Heath.
Following a referendum in June 2016, a majority of voters voted to leave the European Union. This is called BREXIT: contraction of «BRITAIN» and «EXIT», a brutal reversal of the policy led by the United Kingdom for more than forty years.
This referendum organized by Prime Minister David Cameron (conservative) to vote his policy and counter the rise of the UKIP party (UK Independence Party) It has proved to be a risky decision that has been countered by European leaders who are unaccustomed to people being consulted. It deeply divided the British political class and led to the resignation of David Cameron, the challenge to Jeremy Corbyn’s leadership in the Labour Party and repeated political crises with the successive resignations of Theresa May, Boris Johnson and Liz Truss. The new Prime Minister, Rishi Sunak, who came to power in October 2022, is today challenged to restore confidence.
Brexit led to the implementation of Article 50 of the Lisbon Treaty on the separation procedure between a Member State and the European Union (EU). After several years of tense negotiations, it resulted in a Trade and Cooperation Agreement (AAC, which entered into force on 1 January 2021) that prohibits customs duties between the United Kingdom and the EU, but restores border control procedures (“Soft Brexit” scenario that limits the scope of the breach and avoids the spectre of the “no deal”).
« Get Brexit done »
From an economic point of view, Brexit corresponds to a surprising decision that goes against the interests of the business community (especially car manufacturers that have factories on British territory) and the City (while finance accounted for almost 10% of the country’s GDP and London, as a financial centre, has greatly benefited from the freedom to provide services within the European Union). The United Kingdom has cut off some of its main market for merchandise exports (about 60% of its trade) hoping to offset losses through bilateral free trade agreements, particularly with its former colonies and Asian countries.
Brexit stems from a misunderstanding, with Britons feeling oppressed by bureaucratic (largely ghostly) European rules, expressing resentment at fiscal federalism and an unjust financial contribution (we know the slogan of Margaret Thatcher «I want my money back»), and wanting to maintain their insularity while they never really adhered to the political project carried by the Commission of Brussels.
Their relationship to European integration has oscillated between four temptations: support without participation (Churchill), support with participation (Heath and Blair), participation without support (Thatcher and Cameron), condemnation without participation (Johnson and Farage). In total a lot of hesitations…
Brexit was a major surprise. The referendum (« a machine to kill Europe ») opened a period of uncertainty. For the British, the promise of Brexit is based on the hope that they will survive on their own even if they face great difficulties.
References
Bloom & al., “The impact of Brexit on UK firms”, NBER Working Papers Series, 2019.
CEPR, The economics of Brexit: what have we learned ?, 2022.
Teulon, “Brexit at risk”, IFU-PEM Flash n°5, 2023.
The experts who participated in this Flash:
Frédéric TEULON
Agrégé d’économie, Ancien élève de Sciences Po Paris et de l’ENS Paris-Saclay
