Brexit happened when the UK left the European Union on 31 January 2020.
If it feels like little has changed, that’s because both sides agreed many things would stay the same for 11 months, to allow leaders time to reach a deal on life after Brexit.
But time runs out on 31 December and things are far from settled.
Why do we need a Brexit deal?
The EU and the UK always had to agree new rules for how to live, work and trade together.
While the UK was in the EU, companies could buy and sell goods across EU borders without paying taxes (known as tariffs). If there is no trade deal, businesses will have to start paying these taxes, which could make things more expensive.
As well as a deal on goods the UK would like one on services, which are a big part of its economy. This isn’t part of the talks, but separate agreements on things like banking are still possible.
Agreements on areas like airline safety, medicine and the sharing of information about security threats are also important.
How close are we to a deal?
Talks were supposed to end on Sunday, but the UK and EU agreed to continue working on a deal.
There is much the two sides still disagree on. The three main sticking points are:
- The EU is worried the UK could give financial help to its own firms, or find other ways to give them an advantage it considers unfair
- Both sides are concerned about
- They need to decide how any agreement they reach will be enforced
They seem to have made progress on the complicated case of Northern Ireland – the only part of the UK to have a land border with the EU – but that doesn’t mean a compromise can be found elsewhere.
What if we don’t get a deal?
There is a lot of trade between the EU and the UK, which won’t change overnight.
If there is no trade deal, it could mean higher prices in UK shops. There could also be delays as lorries bringing products in would need even more border checks.
Brexit supporters say leaving the EU will give the UK more freedom to strike trade deals around the world.
When the UK was in the EU, it was automatically part of EU trade deals with more than 70 countries. Since leaving, it has made deals with more than 50 of those countries, in order to continue trading in the same way. It is unlikely the UK will manage to do deals with all of the others before the end of the year.
It is also in talks with countries such as the US and Australia with which the EU does not have free trade deals, but none of these trade deals has yet been reached.
And in one sentence?
With the deadline of 31 December fast approaching, the UK and EU agreed to keep talking “to see whether an agreement can even at this late stage be reached”.
So what changes on 1 January 2021?
Deal or no deal, the way people live and work will be different.
- People planning to move between the UK and EU to live, work, or retire will no longer be automatically allowed to do so
- The UK will apply a points-based immigration system to EU citizens
- Travel rules are changing, so check your passport is still valid, that you have health insurance and the right driving documents
- The UK will no longer make such big annual payments towards the EU’s budget
- Arrivals from the UK will stand in a different queue at passport control in EU countries
- Businesses trading with the EU will face a lot more paperwork
Put off by Brexit jargon?
We’ve avoided jargon here, but politicians do use it.
Free trade agreement: This is what the EU and the UK are trying to agree – a deal between countries that encourages trade by getting rid of barriers like taxes on goods
WTO rules: If countries don’t have free trade agreements, they must trade according to rules set by a global body called the World Trade Organization (WTO), which generally involve tariffs, which are taxes on goods brought into a country.
Australia-style deal: How the UK government sometimes describes a potential relationship with the EU if they can’t agree on a trade deal. It basically means trading under the rules of the World Trade Organization (WTO). You can read more about it here.
Transition period: The 11-month period following the UK’s exit from the EU (finishing at the end of 2020), during which time the UK follows EU rules and leaders try to make a deal