Consequences of Brexit for the UK
Written by Pellicer & Heredia
What implications could the UK leaving the European Union have on other European countries?
The answers depend heavily on the political approach. But leaving ideology to one side, Britain brings each year 1,000 million euros to European reserves, which could disappear, warns Mathew Bessley, head of Equity Henderson. Although the math’s are not that simple, because a number of things are not reflected, for example, benefits the country receives from Brussels and what offsets that amount. The fall of British GDP, which AXA IM estimates to range between 2% and 7%, will also have an impact on trade relations with its current partners on both sides of the border.
If demand decreases in the UK, exports fall and companies that trade with each country also have fewer transactions. According to data from the UK´s National Statistics Office, Britain's trade deficit with EU countries reached highs of 89.000 billion pounds in 2015. That means that purchases of French wines, German cars, Spanish vegetables or Italian clothes exceeded what Britain was able to sell to its neighbors, while exports to EU countries fell by 8%.
Do I have to renounce British citizenship to acquire Spanish nationality?
Yes. Except for citizens of countries with whom there is agreement of dual nationality (which is not the case of the UK). When you complete the process of acquiring Spanish nationality, the regulations require, that when you swear loyalty to the constitution, you renounce your nationality in order to obtain Spanish nationality.
If I renounce British citizenship, will I still be entitled to a pension from the UK?
Yes, of course. For the right to a retirement pension you do not have to be a British national but you have to have contributed to the British Social Security. You are required to contribute at least 30 years to collect a full basic pension. Those who do reach this period will receive a basic pension proportional to the amount contributed, with the minimum requirement of one year of contributions.
If the UK leaves the European Union, will I still have the right to use the Spanish health service?
Yes, provided you are registered in Spain and have requested healthcare cover because of limited income, if you are not working.
Will pensions be frozen if the UK leaves the EU?
No not at all. The system for calculating pensions will remain the same:
• Basic pension: Consisting of 113.10 pounds (144.53 euros) per week, which equals approximately 16% of the average wage. This pension is currently revalued in line with the consumer price index.
• Pension linked to income: It is calculated based on the average salary of the professional life of the taxpayer, updated being based on rates of economic growth salaries initial years, and being updated from the calculation based on consumer price index. The average rate in the UK is around 40%, compared with 75% -80% of Spain. This means that public pension is normally about 40% of the last salary of an individual. Therefore, we see is a fairly low coverage rate and left to the private savings to supplement retirement prior to the same levels.
• Pension credit: This is a welfare pension; tax free, for people most at risk of exclusion. It is based on income and not what has been contributed over the period of your working life and it aims to cover a minimum income for those who have reached retirement age and cannot survive with their own resources and other pensions.
If the UK leaves the European Union, I will lose the right to stay in Spain?
No not at all. British citizens remain entitled to the right to enter and move freely throughout the territory of the European Union, either because they are considered "similar" to EU citizens or because they pass the general arrangements for foreigners in Spain.
What about Spaniards living in United Kingdom?
It is still to be decided that in the case that the Brexit is approved, that EU citizens may no longer have benefit or ability to enter UK simply with a passport, and so to enter the country in search of work may not be easy.
Would Spaniards in the latter case need work visas?
Yes, If this scenario were to take place a work permit for professionals who want to develop their career in the UK would be necessary. Authorization for a work permit would be obtained and governed by the rules established in this regard by the British domestic law. Logically, the principle of reciprocity would mean that a British work permit in Spain would also be necessary.
Would the British need a passport / visa to enter EU countries?
In the case that no agreement between the EU and the UK is reached, that has been signed with the integrated EEA block, then yes, since this scenario would not be included within the space of European free movement.
What will happen to Gibraltar?
If the UK leaves the European Union it threatens access to their territory. According to negotiations the gate of the “Linea de la Concepcion” could be resealed with the havoc that entails for daily transit workers on either side of the border.
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