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ECONOMY| 20.01.2021

The UK and the limitations of control 

 

Gonzalo de Cadenas-Santiago

Gonzalo de Cadenas-Santiago

The time has finally come for Brexit, and the UK is no longer a member of the European Union. Has the UK actually “taken back control”? The agreement does not put an end to the Leave campaign’s quest for the UK to take back control, but rather marks the start of a long negotiation period with the EU on matters not covered by its terms.

The time has finally come for Brexit, and the UK is no longer a member of the European Union. Has the UK actually “taken back control”? The agreement does not put an end to the Leave campaign’s quest for the UK to take back control, but rather marks the start of a long negotiation period with the EU on matters not covered by its terms.

Many Leave voters were convinced by the argument that, after Brexit, the UK would suddenly be able to “take back control” and set its own rules, especially when it came to the UK’s borders, laws and fishing rights. According to this misleading view, the UK had always been what economists call a “price-taker,” or a rule-taker, as an EU member. But this was not the case. In reality, only a small proportion of the laws applicable to the UK had been determined by the EU and in most cases, the UK played a key role in shaping the regulatory framework in Brussels. After the vote, the UK will realize that it will not be released from the gravitational pull of Brussels.

For leavers, taking back control was embodied by two buzzwords: fishing and immigration. In terms of fishing, whether the UK has “taken back control” of its waters is up for debate — a transition period of five and a half years sees the EU give up only 25 percent of its current share of the catch in UK waters. In terms of immigration, whether the UK has really taken back control of its borders is equally up for debate. While net immigration from the EU (over which the UK has less control) fell to less a third in the year ending March 2020, immigration from the rest of the world (over which the UK has significant control) almost doubled. These figures raise the question of whether or not the UK will be more effective in “controlling” immigration from non-EU origins after Brexit, when it couldn’t do so before Brexit, even though it had the means necessary. The UK is more likely to have exchanged its population of European migrants for a population of non-European migrants (perhaps mostly from the Commonwealth). That may not be what some of the Leavers had in mind.

The greatest irony of the “take back control” argument is that the UK may well find itself even more exposed to the EU’s occasional over-regulation than before. Without the UK’s more pro-market voice, the coalition of EU member states opposed to an ambitious regulatory agenda will lose influence. If that actually happens, the UK will probably be a country governed by EU rules but without a seat at the table. Many UK-based export companies will be required to manufacture to EU standards to gain access to the EU market and they will want the UK to adopt these same standards to prevent competition that does not export to the EU from undercutting them. So, to answer the question asked earlier: No, it seems the UK has not taken back control.