A decade ago, the UK voted to leave the EU, leading to a sustained period of upheaval and uncertainty. Ten years later, Brexit continues to affect everything from defence and security to the economy, and from tech and AI to the rule of law.

A decade after the UK voted to leave the EU, the impact of Brexit on all areas – legal, political and economic, among many others – is now abundantly clear. It’s resulted in neither the clean break promised by its supporters nor a wholesale collapse – but rather a messier reality somewhere in-between.

While the UK’s gained formal regulatory autonomy through Brexit, in many areas it has chosen continuity, partial alignment or pragmatic cooperation with the EU instead. The upside has been its flexibility in the ability to tailor regulation – for example, in the area of financial services – and to pursue bilateral arrangements outside the EU framework. However, the downside has been the friction inherent in duplicated regulatory processes, a greater administrative burden, legal uncertainty, a lack of influence over EU rules and a persistent need to manage the consequences of separation.

Seven thousand pieces of EU law

In the run-up to the referendum – held in June 2016 – leading supporters of leaving the EU spoke passionately about the UK being able to ‘take back control’ of its lawmaking after several decades of implementing legislation negotiated in Brussels. In practice, the UK’s withdrawal didn’t rip up the EU-influenced legal order overnight. It did, however, expose just how little thought had been given to the true implications of taking back control of the legal system.

The Withdrawal Act serves as a corrective to accounts of the UK’s departure from the EU as a moment of legal rupture, with the post-Brexit period being defined more by inherited continuity than divergence. That’s because the Retained EU Law Bill, which was supposed to create the framework for repealing all legislation derived from the bloc ran into immediate difficulties when the government realised it had ‘absolutely no idea how much retained EU law was on the statute book,’ says Barnard. Initially it was thought there were 3,000 pieces, but that number quickly rose to almost 7,000.

The idea of removing all of this legislation – which included significant law in areas such as food safety and employment – without a plan for its replacement ultimately proved too much, says Barnard. The result, she adds, is that ‘large swathes of EU law are still on the statute book, the courts are applying them, and there is actually remarkable continuity between the way the courts apply the law today and how they would have applied it pre-Brexit.’

This is one of Brexit’s central lessons: divergence is not simply a political choice, but rather a process that requires capacity, expertise, replacement regimes, business readiness and regulatory confidence in order to work. The UK acquired the legal right to diverge, but the process of doing so proved slower, riskier and more burdensome than the rhetoric suggested during the referendum campaign.

The divergence burden

In transactional legal practices, Brexit’s impact has been less about constitutional theory than day-to-day friction. Michaela Britton, Vice-Chair of the Western Regional Group within the IBA European Regional Forum, says that the immediate impact of the vote was that transactional work sharply decreased.

‘There’s additional bureaucracy that companies need to go through to be able to trade and that slows everything down and makes it more costly,’ Britton says. ‘Regulatory divergence is making it so much harder if you’re trying to transport, say, potatoes from the UK to France because you’ll have to go through so many more hurdles to get those potatoes there and to be paid for them. Obviously, that has an impact on economic growth in the UK because everything is going to be more expensive and take longer to trade.’

Official figures indicate that in 2025, UK exports of goods to the EU were down by 14 per cent and imports had decreased by ten per cent, compared to 2019. ‘The impact is felt and will continue to be felt by all of us because goods are more expensive,’ says Britton. She does highlight, however, that since 2024 activity has improved, with sectors such as tech and financial services proving buoyant. Yet while Britton says that this is encouraging, she adds that the outlook is ‘not as optimistic as the Brexiteers sold it.’

The case for financial services

Kerstin Mathias, Director of International Affairs at financial services industry body UK Finance, concedes the economic outlook has been mixed since Brexit, but says there are positives to be drawn from the regulatory freedom the split has brought. ‘Before the referendum economists argued about what the impact of Brexit might be,’ she says. ‘It’s fair to say there was an impact, but it’s important to think creatively about how we can make use of the new ability to set our own regulatory framework to strengthen relationships with the rest of the world, and to position ourselves in the best possible way.’

Mathias says that the UK’s status as a global financial centre depends not on the size of its domestic market but on its international connectivity and that developments such as the Transatlantic Taskforce for Markets of the Future – established by UK Chancellor Rachel Reeves and the US Treasury Secretary Scott Bessent – as well as the Berne Financial Services Agreement between the UK and Switzerland wouldn’t have been possible in the pre-Brexit world.

Indeed, Mathias – and UK Finance – make the case that regulatory autonomy is allowing the UK to design bespoke frameworks, pursue mutual recognition and potentially act as a more agile rule-maker than the EU. This is something her organisation has expanded upon in its recent report Unlocking Growth Through a Stronger UK–EU Financial Services Partnership.

‘The main argument we’re making in the report is that the UK and the EU are two deeply interconnected economies – we share the same regulatory DNA, we face the same global challenges around defence, climate, demographics, the digital transition – and fundamentally we believe we can achieve better outcomes when we cooperate in a purposeful way,’ says Mathias. ‘The question for us is not whether we should work together, but how we should work together, and the political conditions to answer that question are better than at any point since the vote in 2016.’

UK Finance is proposing a roadmap consisting of short, medium and long-term proposals for how the UK can strengthen its relationship with the EU, with the idea being that the country would build up political capital over time. Mathias says there are numerous practical steps that can be taken now to embed financial services into the agenda of the annual UK-EU summit, a ‘moment when we can set the agenda from a political perspective,’ she says.

‘In the medium term we’re talking about a services mobility agreement that could be modelled on what’s currently in place between the UK and Switzerland to reduce frictions for skilled professionals moving between both jurisdictions,’ says Mathias. ‘And in the long term our proposal is around a bespoke UK-EU financial services agreement modelled on the principles that we have seen in the Berne agreement.’

The tech agenda

Technology is probably the area where UK-EU divergence is most marked. It’s a sector where the legal consequences of Brexit are likely to become more pronounced over time. Adam Rose, Vice-Chair of the IBA Technology Law Committee, believes Brexit has brought few positives to the UK economy, and argues that the flexibility being entrenched into the post-Brexit regime could prove attractive to companies seeking to innovate in the technology space.

‘The approach the UK took, which does make some sense if you know the history of where regulation came from […] is much more focused on content. It’s almost like an updated way of looking at TV broadcast and how you capture the harms that the content is doing,’ says Andrew, who has previously worked for the UK’s communications regulator Ofcom. ‘What you see in the UK’s Online Safety Act is much less systemic and I would say is overly focused on material which is, frankly, already illegal, and if something’s already illegal, there are already ways to prevent the damage that that content is doing.’

Andrew was disappointed that the current UK government, as well as previous administrations, didn’t take on the argument that the country needed to move to the concept of tech as a product, rather than only a service – and that what’s required is a liability framework in case harm is caused. ‘We’re still struggling with that and you see the UK trying to backfill where the gaps are with a ban on kids accessing certain technology services rather than the EU approach, which is that these technology services must have safeguards, they must be designed with children in mind, and if you don’t design them like that, you must withdraw them from the market,’ she says.

Marginal gains

Security and defence weren’t central to the debate on the UK’s membership of the EU. Ben Martill, Associate Fellow, UK in the World Programme, at think-tank Chatham House, says the striking thing about defence was ‘how marginal it was in the referendum campaign.’ While he highlights that defence isn’t an area ‘where the EU has historically had very strong competences’, in terms of the pledges made during the campaign, ‘it really wasn’t clear what was going to be offered,’ says Martill.

He says that, at the time, it was assumed continuity would be easy to negotiate, when in fact that wasn’t the case. Indeed, under then-UK Prime Minister Boris Johnson, security and defence were removed from the scope of the future relationship, with the UK ending the transition period with ‘effectively no formal structure on cooperation,’ says Martill.

Russia’s full-scale invasion of Ukraine helped to ‘depoliticise things,’ he says, with conversations on security restarting after the UK went to the EU to help support Kyiv. That paved the way for now-outgoing Prime Minister Sir Keir Starmer – who had long made the case for resetting the UK’s relationship with Brussels – to sign the Security and Defence Partnership with the EU in spring 2025. This aims to strengthen cooperation in various security areas, including support for Ukraine and defence-industrial spending.

Despite this, Martill is clear that the UK is in a difficult position in terms of security. ‘We’ve seen a return of war on the European continent,’ he says. ‘Europe itself is fragmented, but is also torn between competing powers in the international system whose democratic credentials are very much challenged and who in many cases have very aggressive positions towards the EU, some more so than others. For Europe, being caught between Putin’s Russia and Trump’s United States is a very, very difficult situation to be in.’

This, he says, made life ‘extraordinarily difficult’ for Starmer during his time as Prime Minister. ‘It’s very difficult for the special relationship because Trump doesn’t seem to believe in special relationships and Britain is still outside the EU, so we’re not as influential there as we would have been as a member,’ says Martill.

The reset in UK-EU relations is very important. ‘It’s allowed for conversations on the UK’s potential accession to some pretty significant EU initiatives and we’ll see movement on that in the next few years,’ says Martill. He highlights that it’s also a platform to discuss alternatives, noting that outside the relationship with the EU there has been the re-emergence of cooperation between the UK, France and Germany – the ‘E3’ countries.

The major lesson

As a result of Brexit, the UK has a great deal more regulatory autonomy. It can tailor its financial services regime, pursue bilateral mutual recognition agreements and adopt its own approach to emerging technologies. Autonomy, though, is not the same as advantage and the very real downside is that divergence has created friction in every sector where the UK and EU markets remain deeply connected.

The deeper lesson is that Brexit has not freed the UK from the need to engage with Europe but rather has changed the terms of that engagement. The UK now absorbs, mirrors, departs from or negotiates around EU frameworks – relating to everything from trade and tech to freedom of movement and security – from the outside. That may offer room for manoeuvre, but it also means reduced influence over the rules that continue to affect the UK’s businesses and citizens.

Margaret Taylor is a freelance journalist and can be contacted at mags.taylor@icloud.com