What does the UK and EU Brexit breakthrough deal mean?

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The UK and EU have reached agreement on phase one of the Brexit negotiations. What’s been agreed and in the Brexit deal what still needs to be discussed?

  • The specified date is the date the UK will withdraw from the EU. The UK has set this as 29th March 2019, but this document doesn’t seem to confirm this.

SAVVY TIP: I’ve used 29th March 2019 at various points in this document to avoid the clumsy phrase ‘specified date’.

The right for EU nationals to live in the UK after Brexit

I’ve referred to the right to live in the UK after Brexit in the header, but this also applies to the right of UK citizens to continue living in an EU country after Brexit. Here are the main points:

  • EU and UK citizens: EU citizens who are legally living in the UK on the date of withdrawal will be able to stay. Their family, (as defined by an EU Directive, called 2004/38/EC), will also be able to stay if they’re legally resident on March 29th 2019.
  • The UK and EU nations aren’t allowed to discriminate on the grounds of nationality against UK or EU citizens or their family members who are covered by this agreement.
  • Certain family members who aren’t living in the UK on the specified date will be able to join someone who is an EU citizen or someone who has the right to live in the EU after we leave the EU. It doesn’t matter whether the family member comes from an EU country or elsewhere. They’ll have this right for the lifetime of the EU or UK citizen they’re joining. So, my understanding is that if a woman from – for example – France is legally resident in the UK on March 29th 2019 and she has a non-EU husband, he would have the same right to come and live in the UK after we leave the EU, as if we were still in it.

SAVVY TIP: You can read more detail about the EU Directive – which family members are included and which aren’t – on the Gov.uk website. It is a 25-page legal document and not completely user friendly.

  • Someone who’s in what’s described as a ‘durable relationship’ but who isn’t living in the UK on March 29th 2019 may be able to join their partner after March 29th (this also applies to someone from the UK who wants to join their partner who’s living in the EU). However, they won’t automatically have the right to live in the UK. For a start, the agreement says that their relationship must have existed and been ‘durable’ (not sure how they’ll define that one!) on March 29th 2019 and the relationship must exist when they want to join their partner.

SAVVY TIP: Today’s agreement also includes children born to or legally adopted by parents who are both protected by the UK/EU withdrawal agreement, or where one parent is protected by the withdrawal agreement and the other is a UK national (assuming they both want to live in the UK). It also applies to children who live with one parent or split their time between their parents.

Other family members may be able to join EU relatives living in the UK after March 29th 2019 but their application will be subject to UK law.

  • The UK (and EU states) can ask people covered by this withdrawal agreement to apply for the right of residence – and to be given a document showing they’re entitled to live here. If people don’t apply, or aren’t successful, they won’t have the right to live here.

SAVVY TIP: The agreement specifically says that application forms will be short, simple and user friendly. Blimey! It says that the UK (and EU states) will work with applicants to ‘help them prove their eligibility’. However, someone making fraudulent or abusive applications can be removed from the UK.

  • If you already hold an EU document giving you permission to live permanently in the UK that will be converted into a new document free of charge. Your identity etc would be verified at the time and you’ll be subject to a criminal and security check.

SAVVY TIP: Anyone applying for the right to reside in the UK would have to declare criminal convictions.

  • If you have the right to live in the UK (or an EU country), you’re allowed to leave that country for up five years (it has to be five consecutive years, not five years spread across a longer period) and you’d still keep your rights.

Social security

I have to be honest and say I didn’t understand this when I first read it, but I have done some research on the Parliament website and think I’ve got my head around it. For background, there are four principles laid down in two different European Commission regulations which were passed in 2004 and 2009 (ie these principles are not new). These are:

  • EU nationals are covered by the legislation of one EU state at a time so they can’t claim benefits from their home state and the country they’re living and/or working in. In most circumstances, someone who’s working is subject to the laws of the state they’re working in or most recently worked in.
  • EU nationals have the same rights and obligations as the nationals of the country where they are covered.
  • When an EU national claims a benefit, their previous periods of insurance, work or residence in other countries are taken into account if necessary and
  • If an EU national is entitled to a cash benefit from one EU country, they may generally receive it even if they are in a different country.

Today’s agreement says that EU citizens who are covered by UK legislation (see the first bullet point) on the date we leave the EU, plus those who have the right to live in the UK as I’ve outlined earlier in this article, will still be covered by the social security principles outlined in the bullet points. It also applies to UK nationals subject to legislation of one of the remaining 27 EU countries.

EHIC (European Health Insurance Card)

UK citizens who are in an EU country when the UK leaves Brexit (and vice versa for EU citizens), whether staying on holiday or living there, will be eligible for healthcare reimbursement (including via their EHIC) as long as their stay, residence or treatment continues.

SAVVY TIP: The EHIC scheme gives someone who lives in one EU country the same rights to healthcare if they travel to another country, as someone who lived there. You can read more about this in my article on using your EHIC – what does it give you?

Citizens’ Rights

People’s rights will be protected. EU citizens who have the right to live in the UK at the time we leave the EU will have the same rights to work, self employment etc as UK citizens.

The courts in the UK can ask the European Court of Justice to rule on cases for eight years after we leave the EU.

Ireland and Northern Ireland

There’s a lot in this section and I’m just going to highlight one clause (Clause 49). It says that the UK is committed to protecting co-operation between Ireland and Northern Ireland. And, importantly, in relation to Northern Ireland and Ireland, if there’s no agreement [I’m assuming no substantive Brexit deal] , the UK will maintain full alignment with the single market rules and the Customs Union that support co-operation between Ireland and Northern Ireland, support the economies of Ireland and Northern Ireland and protect the 1998 (Good Friday) agreement.

It means there will be no border between Ireland and Northern Ireland. But it also says that the UK promises to have a system that achieves the same ends as the single market and Customs Union.

People from Northern Ireland will continue to have the right to choose to be Irish or British.

Financial settlement

There have been lots of reports that the Brexit divorce bill has been agreed at between €35 and €39 billion. That’s not spelled out in this agreement. What it does say is that payment will be in euros (no surprise there!). It also says that:

  • The UK will continue to pay into the EU budget in 2019 and 2020 as if it was still in the EU. Any rebates or amounts returned will be worked out on the same basis.
  • Any budget commitments that the UK has already signed up to and that are owing on 31st December 2020 will be paid by the UK.
  • The UK will also be liable to pay its share of ‘contingent liabilities’ (such as government guarantees) as owing on the withdrawal date.
  • In terms of working out the Brexit bill, it says that the UK won’t pay for anything that doesn’t require funding from EU member states. I would have thought this was obvious, but perhaps it’s better to have it in black and white!
  • Any opt-outs the UK has that exist on the withdrawal date will apply to the Brexit bill. I think that means we won’t be expected to pay for things like euro bailouts, because we opted out of the euro.
  • We’ll pay our bill as the liability needs to be paid – not upfront. This means that if we’ve agreed to pay something that is due to be paid in 2040, we won’t have to pay it in 2019 in order to leave the EU. This can only be changed if the EU and the UK agree to it.
  • When working out how much the UK owes, the EU says it will use publicly available data where possible, so it should be possible to work out how they’ve arrived at their sums.
  • After the UK has left the EU, we will continue to take part in programmes paid for by the MFF (the multi-annual financial framework, which lasts from 2014 – 2020), until these programmes close. Organisations in the UK will be able to take part in these programmes.

SAVVY TIP: What happens beyond 2020 will be dealt with in phase two of the negotiations. The UK has already said it may wish to participate in some programmes as a non-EU member after 2020.

European Investment Bank

The European Investment Bank (EIB) is owned by the EU member countries. It provides finance for sustainable investment projects that ‘contribute to EU policy objectives’ (according to its website). More than 90% of its activity is in Europe but it invests elsewhere as well.

As part of the agreement:

  • The UK will guarantee an amount equal to our ‘callable capital’ in the EIB on the day we leave the EU. That means the amount of money we’ve promised but not necessarily paid.
  • The money the UK has already invested in the European Investment Bank will be repaid in 12 annual payments starting at the end of 2019.
  • The UK ‘considers there could be mutual benefit from a continuing arrangement between the UK and EIB’. This means the UK doesn’t have to continue to pay towards the EIB, but it is keeping that option open.

European Development Fund

The UK will be part of the European Development Fund until the closure of the 11th fund (this ends in 2020). The European Development Fund (EDF) provides development aid to African countries, Caribbean and Pacific countries and other overseas countries. As investments mature, the UK’s share of any money will be paid back.

Other areas

  • Euratom (which oversees the supply of nuclear fuels within the EU). The UK will be responsible for nuclear safeguards in the UK – these will be equivalent to existing Euratom arrangements.
  • Goods made available to be sold in the EU before the withdrawal date can be transferred in the UK and EU with no need to modify them or re-label.
  • EU rules on disputes should apply to contracts drawn up before the withdrawal dates and also where an event that caused ‘damage’ to one party happened before the withdrawal date.

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