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What is a Soft Brexit? Definition and meaning

The definition and meaning of Soft Brexit is one of the ways Britain might separate itself from the European Union – the other way is with a Hard Brexit. Both terms refer to how close or distant the UK’s relationship with the European Union will be after the divorce is finally completed.

BREXIT stands for BRitain + EXIT, i.e. BRitain Exiting from the European Union (EU). This is something that is going to happen after 52% of the electorate voted to leave the EU in a referendum on 23rd June, 2016.

UK’s Prime Minister Theresa May, who during the referendum campaign was against Brexit, says she must respect the will of the voters.

Soft Brexit compared to Hard BrexitMost economists and business leaders say a Soft Brexit is essential for the future economic well-being of the United Kingdom. The electorate voted to regain control of the country’s borders, which probably means aiming for a Hard Brexit.

Mrs. May stresses that ‘Brexit means Brexit’. During the next couple of years at least, she and her Cabinet will have to focus on two important issues when guiding the country through the separation path:

– How much control Britain regains regarding the movement of people into the country from across the continent.

– How British companies do business with the EU.



What is a Soft Brexit?

Of the two main options facing Britain, Soft Brexit is the gentler one. It is a kind of semi-detached separation, in which the country gains a degree of independence while at the same time maintaining some of the EU features it currently has.

EU Market: the UK would still have unfettered access to the EU market, with its 500 million consumers. More than half of all the country’s exports go to that market. Maintaining free access to the EU market and belonging to the customs union is vital for the economic health of the country, says the vast majority of Britain’s captains of industry.

What a Soft Brexit includesA Soft Brexit would have everything the business community wants, but would be extremely unpopular with most voters, who insist the country regains control over its borders.

Passporting Rights: this refers to financial institutions in the UK being able to operate across the whole EEA (European Economic Area), which consists of all EU member states plus three other countries – Norway, Iceland and Liechtenstein.

For London to remain the financial centre of Europe it would have to continue having passporting rights – with a Soft Brexit, it would.

Passporting is a bit like a kind of passport that banks and other financial institutions get to do business across most of Europe, rather than having to deal with each country’s authorities separately.



Free Movement of People: in order to keep access to the market and passporting rights Britain would have to sign up to the free movement of EU citizens. They would be able to come into the UK – live and work in the country – without needing any special visas.

Most British companies would prefer the UK either to stay in the EU or leave with a very Soft Brexit, while 52% of the electorate want to get out and regain total control of the country’s borders at any cost.

One of the main concerns – possibly the main concern – leading up to the 23rd June referendum, was border control – regaining the ability to decide who can and cannot visit, reside, study or work in the country. Had border control not been such a high priority, the majority of British people would probably have voted to remain in the EU.

Richard BransonSir Richard Branson, founder of the Virgin Group, and one of Britain’s most respected business magnates, worries that if the Government does not go for a Soft Brexit the country will end up isolated in the wilderness. (Image: twitter.com/richardbranson)

What is a Hard Brexit?

The definition of a Hard Brexit means regaining total control of the country’s borders at all costs – even if that means losing free access to trade within the EU market. This appears to be what the majority of British voters want.

Leaders of EU member states as well as the European Commission have emphasized that if the UK refuses to sign up to the free movement of people, it will not get unfettered access to the market or passporting rights.

This would mean that Britain would have to trade with the EU as if it were any other nation in the world outside Europe, based solely on World Trade Organization (WTO) rules.

Hard Brexit features gained and lostA Hard Brexit would mean Britain regaining control over its borders, which was a top priority for voters in the referendum. However, UK exports would probably have tariffs (taxes) imposed, which would make products considerably less competitive in the EU market. Losing passporting rights would be bad for companies in London and the capital’s status as Europe’s financial hub.

Until an exclusive UK-EU deal was signed, which could take up to a decade to negotiate, British exports would be clobbered with tariffs of between 10% and 20%. There would probably be additional trade restrictions.

Timeline linked to Brexit type

How long it takes for the UK-EU divorce to complete also determines what kind of Brexit the country will have, many experts say.

Brexit negotiations will take several years – at least two. Many experts do not believe that anything final will be signed for at least five or perhaps even ten years.

After Article 50 is invoked, there may be some kind of transitional arrangement. Article 50 – part of the Lisbon Treaty – includes a basic five-point plan that an EU member state can use should it wish to leave the EU.

Article 50 must be invoked when a member state signals the beginning of exit negotiations. According to Article 50, separation takes two years to complete.



The European Commission makes the following comment regarding Article 50:

“During negotiations under Article 50, European Union Treaties and law continue to apply to the UK. If no agreement is reached within 2 years of the UK activating Article 50, the UK would leave the EU without any new agreement being in place.”

A transitional arrangement, which could be in place for several years and would give the UK free EU-market access, passporting rights, plus the country would have to accept the free movement of people, would be seen as a Soft Brexit. Even though it would be just a temporary arrangement, if it lasted several years the Soft Brexit label would soon stick.

Are voters really Hard Brexiteers?

Several politicians, economists and business leaders have said that many British voters who are currently Hard Brexiteers would rapidly become Soft Brexiteers as soon as they fully understood what the economic price was.

Those who campaigned for Brexit before the referendum, including members of anti-EU UKIP, Boris Johnson (who is now Foreign Secretary), and a minority of business people, said that the pro-Remain camp was using scare tactics to make people vote to stay in the EU. The Remain camp said a Brexit vote would be immediately followed by an economic meltdown.

Since 23rd June, virtually all economic indicators have suggested that the UK economy is doing extremely well and has been unaffected by the Brexit vote. This does not mean that the Remain-camp was wrong – perhaps it is still too early for the unpleasant consequences to become evident.

The British pound soon devalued after the referendum and is still worth about 15% less compared to the US dollar. However, a cheaper pound means lower-priced exports for UK’s foreign clients. Since the vote, British exports have increased considerably.

The Prime Minister’s predicament

It does not matter which way Mrs. May leads the country – whether it be down the Hard or Soft Brexit route – she will be making a huge mistake as far as many people and groups are concerned.

A Soft Brexit would, in theory, protect Britain’s economy, please the country’s business leaders, and secure future investments across much of the country – jobs would also be protected.

However, 52% of the electorate would be furious with a Soft Brexit, because control over immigration would not have been regained. The Government would be accused of making a backwards step – failing to regain control over immigration, and losing any say in future EU law making, i.e. Britain’s border control would literally be decided 100% by other countries.

A Hard Brexit would please most of the electorate, but would likely come with a huge economic cost, business leaders say. The Prime Minister and her Cabinet would be blamed for any recession or rise in unemployment that ensued.

Mrs. May has to decide what type of Brexit to aim for. She has to bear in mind the following factors while trying to map out the route:

– What the electorate wants.

– The health of the country’s economy.

– What the heads of the EU member states are likely to agree to. Any deal has to be approved by the heads of state of every EU country.

Video – Hard or Soft Brexit?

Theresa May did say “Brexit means Brexit”. However, the term has a lot of meanings. Which one would be best for the UK?