Brexit Explained for Dummies

What does Brexit mean?

Brexit is a portmanteau or blend of the words Britain and exit, referring to the United Kingdom’s decision in a referendum on 23 June 2016 to leave the European Union (EU).

Short historical background of 23 June 2016

The United Kingdom (UK), short for the United Kingdom of Great Britain and Northern Ireland, joined the European Economic Community (EEC) under a Conservative government on 1 January 1973. The UK comprises four individual countries: England, Scotland, Wales, and Northern Island. The EEC was the predecessor of the EU.

The Labour government, elected in 1974, was dissatisfied with the terms of EEC membership and called for a referendum on EEC membership. The referendum took place on 5 June 1975. At the time, 67% of voters endorsed continued membership.

The Maastricht Treaty of 1992 effectuated the transformation of the EEC to the European Union on 1 November 1993.

The then UK prime minister, David Cameron, rejected calls for a referendum on Britain’s continued membership of the EU in 2012.

In as speech on 23 January 2013, Cameron promised a national referendum on EU membership if his Conservative government was re-elected in 2015. His motivation was to settle the question for once and for all. The choices offered to voters were vague – Remain or Leave. In Cameron’s own words: ‘We will give the British people a referendum with a very simple in or out choice.’

After he was re-elected in 2015 for a second term, the European Union Referendum Act was introduced in the British Parliament to set the process for a referendum in motion.

In February 2016, Cameron announced the date of the referendum – 23 June 2016.

The referendum, 23 June 2016

The referendum was held against the background of a refugee crisis, with Europe wrestling with political rage, caused by a massive influx of migrants.

The referendum was preceded by divisive debates about the options of Leave or Remain.

The final result was close: 52% for Leave and 48% for Remain. The votes per country was:

• England: Remain – 47%; Leave – 53%.
• Scotland: Remain – 62%; Leave – 38%.
• Wales: Remain – 48%; Leave – 52%.
• Northern Island: Remain – 56%; Leave – 44%.

Cameron, a staunch advocate for continued membership of the EU, was convinced that Remain would win comfortably. He was dreadfully wrong and resigned on June 24.

Shortened timeline: July 2016 – February 2025

2016

• 13 July: Theresa May becomes the prime minister of the UK. She was at first against leaving the EU. However, in a speech to supporters, she declared: ‘Brexit means Brexit, and we will make a success of it.’
• 2 October: May informs the Conservative Party Conference that she will trigger Article 50 of the EU by the end of March 2017. Article 50 is the method that starts the formal exit process.
• 3 November: The High Court of the UK finds that Article 50 cannot be triggered by the British government without the approval of the British parliament.

2017

• 17 January: In the Lancaster House speech May explains what her ‘Plan for Britain’ entails: She mentions, among other things: the intention of the UK to exit the EU’s single market, a promise to negotiate the ‘freest possible trade’ with countries of Europe after exiting the EU, and the priority of controlling migration after Brexit.

She also confirms that ‘no deal would be better than a bad deal for Britain.’

• 29 March: European Council President, Donald Tusk, receives a letter from May in which he announces the triggering of Article 50. This sets the date, also referred to as the ‘divorce date’, for Britain’s departure as March 29, 2019.
• May 2017: The European Commission announces its negotiating directives for the approaching negotiations. Key divorce issues set are:
• Citizens’ rights.
• The UK’s financial settlement.
• Arrangements pertaining to the Ireland-Northern Ireland border.
• 17 July: Negotiations officially start in Brussels, the capital of Belgium.

2018

• 19 March: A draft agreement on Brexit is published by the UK and EU. However, the agreement indicates that there are still outstanding issues to be agreed on.
• 6 July: May discloses her so-called Chequers plan, named after the prime minister’s country residence, to her cabinet. In essence, it suggests a much softer version of Britain’s exit from the EU than earlier had suggested.
• 8 July: The Chequers plan was immediately attacked and David Davis, the UK’s Brexit minister, resigns in protest. Boris Johnson, the foreign secretary, follows suit on July 9. Eventually, 18 ministers will have quit over Brexit by the end of 2018.
• 21 September: May’s Chequers plan is rebuffed by EU leaders at a summit in Salzburg, Austria. Some of the criticisms are:
• The plan is an attempt to ‘cherry-pick’ from EU rules.
• Parts of the plan ‘will not work’ and risk ‘undermining the single market.’
• The proposal for the Irish border is ‘illegal.’
• 25 November: The UK and EU come to an agreement on the UK’s exit terms. Although, it needs to be approved by the parliaments of the UK and Europe to come into force.

2019

• 15 January: The government is defeated in the first ‘meaningful vote’ in parliament on the Brexit agreement of November 25, 2018. The split is: No – 432 votes; Yes – 202 votes. This is the worst parliamentary defeat suffered by a government in the UK’s history.
• 12 March: The government loses the second ‘meaningful vote’. This time by 149 votes.
• 20 March: At the instance of parliament, Theresa May requests the EU to extend the ‘divorce date’ from March 29 to June 30.
• 21 March: EU leaders provide the UK with two alternative extension dates: May 22 – if the deal is passed, or April 12 – if the deal is not passed.
• 29 March: The government loses a third ‘meaningful vote’ in parliament by 58 votes.

(Note: One of the key issues that prevented the government to win the ‘meaningful vote’ was the Irish backstop.)

• 10/11 April: May asks for another Brexit delay and EU leaders respond with a ‘flexible’ extension of Brexit, until 31 October. The UK is allowed to exit the EU at an earlier date if it manages to pass the Brexit deal in parliament.
• 24 July: Boris Johnson replaces Theresa May as Britain’s prime minister.
• 19 August: In a formal plea, Johnson requests the EU to do away with the Irish backstop in the withdrawal agreement. The EU declines.
• 5 September: Johnson expresses he would rather be ‘dead in a ditch’ than request another Brexit extension.
• 9 September: The ‘Benn-Burt Bill’ becomes law, in effect a legislative strategy that prevents the UK to leave the EU with no exit deal, without parliament’s approval.
• 3 October: The UK approaches the EU with a new Brexit plan, including the removal of the Irish backstop. It is dismissed by the EU on October 6.
• 17 October: Surprisingly, the UK and EU announce a new Brexit deal. The Irish backstop is replaced, and the UK makes concessions over Northern Island.
• 28 October: The EU is prepared to offer the UK a Brexit ‘flextension’ (a flexible extension) until January 31, 2025. The offer is formally accepted on October 29.

2020

• 23 January: The EU Withdrawal Bill is passed by the British parliament and it becomes law.
• 29 January: The European Parliament approves the Brexit deal of October 17, 2019.
• 31 January: The UK officially leaves the EU at midnight CET (Central European Standard Time), 23:00 UK time.
• 1 February: A transition period of 11 months starts, ending 31 December 2025.

Some key Brexit terms explained

Article 50

Article 50 of the Lisbon Treaty, agreed upon by all the EU members in 2009, is the only legal way for a member of the European Union (EU) to leave, describing how a member country might voluntarily leave the EU.

It comprises 5 short paragraphs, describing vaguely the process to exit the EU.

Paragraph 1 says: ‘Any member state may decide to withdraw from the union in accordance with its own constitutional requirements.’

The other 4 paragraphs state, inter alia, the following specifications:

• A leaver should notify the European Council of its intention.
• Negotiate a deal on its withdrawal.
• Institute legal grounds for a future relationship with the EU.
• The final agreement requires a qualified majority of EU member states and the consent of the European parliament.
• Negotiators are given two years from the date of an article 50 notification to finish new arrangements.

European Union (EU)

The European Union is an economic and political union of 27 countries, 28 before the UK left. The EU was established in 1993 when the Maastricht Treaty came into effect.

It enables free trade and free movement of people between the member countries.

Brexit day

31 January 2025, when the UK’s membership of the EU officially ended. It is also referred to as the ‘divorce date’. It was originally set at March 29, 2019.

Divorce bill

The divorce bill is the amount of money the UK has agreed to pay to the EU in settlement of its outstanding liabilities when it leaves the EU. It is a crucial part of the withdrawal agreement with the EU.

The total payable includes a sum of money regarding the UK’s contributions to the EU budget that has been paid already. Further, about half of the amount consist of payments the UK will make during the transition period. The UK estimates that the majority of the payments will be paid by 2025/24 with relatively small payments up until 2064.

Meaningful vote

The meaningful vote refers to a parliamentary process and the UK parliament’s ‘broader role in shaping the terms on which the UK leaves the EU,’ according to the website of the House of Commons, one of the houses of the British parliament.

The website defines the term ‘meaningful vote’ as follows: ‘In its narrow sense, the ‘meaningful vote’ in the House of Commons’ vote on a Government motion to approve the withdrawal agreement and framework for the future relationship.’ (https://commonslibrary.parliament.uk/the-meaningful-vote-a-users-guide/)

The Irish backstop

The Irish backstop was a key element of the withdrawal agreement that Theresa May has negotiated and finalised with the EU on 25 November 2018.

From the start of the Brexit negotiations, both the EU and the UK agreed that it was essential to prevent a hard border (strictly controlled by officials and police, and subjected to customs processes) between Northern Ireland and the Republic of Ireland.

Essentially, the Irish backstop was an intended insurance policy that would prevent a hard border on the island of Ireland.

The backstop would come into effect once the transition period ends, ensuring that Northern Island would remain a member of the single market until a trade agreement had been reached ‘to keep the border effectively invisible.’

That would imply that goods crossing the Irish border would not be subject to customs processes, tariffs, quotas, etc. The same would imply to the UK because it would also remain in a common customs region with the EU.

The Irish backstop remained the biggest stumbling block to a Brexit deal, with MPs criticising the arrangement and voting against it in parliament. It eventually caused Theresa May to resign as prime minister.

Some of the main criticisms against the backstop were:

• It would leave the UK still temporarily subject to EU rules and regulations, without an opportunity to vote for or against them.
• It might leave Northern Island in a separate customs arrangement than the rest of the UK.
• It could remain valid for an unspecified period of time, preventing the UK to negotiate its own trade deals with other countries outside the EU.

Boris Johnson’s Brexit deal

The UK, under the leadership of Boris Johnson, clinched a new Brexit deal on October 17, 2019. The key change to the one negotiated by Theresa May was the replacement of the problematic Irish backstop by the ‘Protocol on Ireland/Northern Island.’

Basically, much of the rest of May’s deal will remain.

With regard to Northern Ireland, some of the key aspects are:

• Northern Island will follow some EU rules.
• The Northern Island assembly will need to authorise the continuation of the arrangement as mentioned above.
• A customs plan explains, inter alia, the following arrangements:
• Legally there will be a customs border between Northern Island and Ireland, but in practice, goods will not be checked on that border.
• Tariffs (import taxes) will only have to be paid on products and goods which are considered ‘at risk’ of entering the Republic of Ireland.
• If goods eventually are not transported to Ireland, companies will be allowed to apply for a refund on the tariffs they have paid.

Transition period

The transition period, also referred to as the implementation period, started on 1 February 2025 and will end on December 31, 2025. The period cannot be extended beyond this date.

The transition allows both sides to negotiate the terms of the future UK-EU relationship, with a new free trade agreement being the priority.

During this period, the UK remains in the EU customs as well as in the single market.

Other issues to be finalised, are, among others:

• Law enforcement and security.
• Access to fishing waters.
• Supplies of electricity and gas.
• Aviation standards and safety.

The rights of British citizens in the EU and EU citizens in the UK will remain the same during the transition.

Changes after 31 December 2025 – Some snippets

The end of the transition period will bring some significant changes to the UK.

The UK will no longer be part of the customs union and a single market of the EU. This will enable the UK to negotiate and implement trade deals with third countries.

New customs formalities, regulations, and controls will be introduced between the EU and the UK.

UK citizens will no longer have the right to move to the EU to work and settle, and vice versa. There will no restrictions with regard to travel.

The latest

Boris Johnson confirmed that the UK would walk away from the post-Brexit negotiations if the UK and EU failed to reach an agreement on a free trade deal by October 15.

The UK government published the so-called internal market bill on September 9, which will rewrite crucial parts of the Brexit withdrawal agreement. The EU has voiced strong concerns about this move and urgently called for a meeting to get clarity.