After being released from EU commercial and “free movement” regulations, the UK has been implementing its own trade and immigration policies. Changes have an impact on people, travel, and business. In 2022, the government is committed to providing the benefits that Brexit promised.

Brexit in 2022 – Legal Divergence from the EU

In a speech to the House of Lords in September 2021, Lord Frost, then Minister of State, stated the government’s intention to conduct an ongoing assessment of Retained EU law to repeal or alter it. The UK will seek legal divergence from the EU in several industries. Read on to look at some of these areas and the expected results of Brexit in 2022.

Agricultural Sector 

The UK has implemented a new agricultural subsidy regime, which attempts to modify the way agricultural subsidies are distributed. The new approach is meant to reward farmers for their environmental stewardship of the land. These improvements will significantly impact how UK farmers can use their land.

Furthermore, the UK Government’s response to the gene-editing consultation in September 2021 revealed its willingness to move beyond the EU in this area. Accelerated approval pathways for gene-edited crops would encourage more international investment, creating an advantage for the UK as a benefit of Brexit.

Asylum and Immigration

The UK has enacted a new Nationality and Borders Bill, currently making its way through Parliament. This Bill incorporates new immigration, asylum, and nationality laws and penalties for people smugglers. The Bill is designed in part to indicate that the government is following through on the Leave Campaign’s ‘Take Back Control’ slogan, which was centred, at least in part, on border control.

Foreign Direct Investment

The National Security and Investment Act went into effect on January 4th. When combined with amendments to the Takeover Code, it represents a significant shake-up of the UK investment regime, with ramifications for M&A and other transactions. The Act tries to strike a balance between supporting FDI and preventing more UK enterprises in particularly sensitive sectors from falling under ‘foreign’ control and ownership.

Control of State Aid and Subsidies

The government has introduced the Subsidy Control Bill, which will replace the EU-wide state aid legislation. The Bill is still being debated in Parliament and is expected to go into effect later this year.

The Bill represents one of the most major post-Brexit legislative developments. Devolved Administrations and Local Authorities will have the authority to provide subsidies to businesses in order to support the government’s ‘levelling up’ agenda and promote more equitable economic growth across the UK. At the same time, it will help avoid ‘bidding wars’ that could result in inefficient relocation of businesses and jobs from one part of the UK to another.

An Overview of Post-Brexit Tension with the EU States 

The UK has begun implementing some import limits on EU products as of January 2022, after repeatedly postponing border checks due to supply chain concerns. London and Brussels have fought over a number of topics, including diplomatic representation, vaccine exports, and, most importantly, new arrangements for Northern Ireland.

Despite being a part of the UK, Northern Ireland continues to obey some EU standards as part of the Brexit divorce agreement in order to maintain an open land border with the Irish Republic, which is an EU member. However, tensions have erupted over the negotiated Northern Ireland Protocol outlining the new procedures.

Post-Brexit tensions have also persisted in Scotland. Tensions between the British and French administrations over fishing licences and migration over the English Channel are also evident.

The Bottom Line 

We can conclude that despite the ongoing tensions, Brexit was not the tragedy that many predicted. There has been a knock to commerce, but that hit may just be transitory. Considering all, the economy has held up fairly well.

Investments are expected to recover further in 2022 – and this is before the government has made any significant effort to capitalise on the benefits of Brexit. The benefits of trade agreements with the rest of the globe will start manifesting.

 

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