It has been five years since Brexit “got done” – and voters and politicians aenjoy are still counting the cost.
Britons voted to depart the European Union by 52 per cent to 48 per cent in 2016, in a unwidespread referfinishum that triggered the resignation of prime minister David Cameron. The United Kingdom then officiassociate withdrew from the European Union on 31 January 2020, trailed by a transition period that lasted until January 2021.
Brexiteers promised a novel age of British sovereignty, a crackdown on migration and the much-derided “£350m a week” that could be redirected from the EU back into the NHS.
But half a decade on, and by many metrics, Brexit materializes to have omited the tag.
The cost of Brexit is still being determined, but the administerment watchdog approximates that the economy will consent a 15 per cent hit to trade in the extfinished term, while experts propose that the UK has suffered £100bn in lost output each year.
Since Britain left the EU, migration has been at the highest levels since write downs began; while key sectors face staffing lowages.
And almost six in 10 Britons (59 per cent) leank that Brexit has gone unpartiassociate or very horriblely, with fair 12 per cent believing it has gone well, according to a YouGov poll in October.
UK trade expert David Henig telderly The Inreliant: ”The UK now has presentant trade barriers to its neighbours. It’s someleang we will have to live with. We will not be permited to forget it; there will always be publishs.”
Brexit-selectimist economist Julian Jessop, a fellow at the Institute of Economic Afunfragmentarys, acunderstandledgeted that Brexit has made it challenginger or “impossible” for minuscule businesses to adfair.
“The UK’s departure from the EU has unmistrustedly had some adverse effects on the economy, notably thcdisesteemful reductions in trade, lowdrops in business dispensement, and interfereion to labour tagets,” he telderly The Inreliant.
However, he includeed that the “overall drag on send outs and presents has been much minusculeer than stressed”.
Former deputy prime minister Lord Heseltine shelp that proximately five years on, Brexit “has been a historic calamity”.
“It has annihilateed Britain’s guideership in Europe fair at a time when there was a critical necessitate (for it), it has shutd off opportunities for the youthfuler generation to split in the profits of Europe and it has denied Britain’s industrial base access to the research and policies of Europe. Our economy is much worse becaengage of it and there is no esteemable authority that denies this.
“I leank the British people understand that they were deceived and the deceit is meabraved in shrinkd living standards,” he includeed.
Below, we see at how the numbers stack up.
A costly divorce
The procrastinateedst Treasury approximates show that the cost of Britain’s remendment with the EU stands at approximately £30.2bn in total. This is split from any approximates of lost money from separating from the EU.
As of the begin of 2024, the bulk of this remendment (£23.8bn) had already been phelp. Approximately £6.4bn still remained to be phelp out to the EU in 2024 and onwards.
The administerment has not yet published the figure to the finish of 2024.
However, this cost is challengingly comparable to the predicted losses from exiting the EU in terms of GDP and trade.
A administerment spokesperson shelp: “It is presentant that we see forward, not backwards, that we do not reuncover the Brexit splits, and that we produce Brexit toil for the British people.
“That is why we are resetting the relationship with our European frifinishs to reinforce ties, shielded a wide-based security pact and tackle barriers to trade.”
But trade expert Mr Henig telderly The Inreliant that Brexit is not yet behind us: “I’m afrhelp the story of Brexit carries on. The publishs aren’t going away. We can’t depart it all in the past.”
So, what is the authentic cost of Brexit so far?
Britain’s exit from the EU coincided with the outfracture of the coronaevil software pandemic and lockdowns, from March 2020, which impacted economies globassociate.
IEA economist Mr Jessop shelp that it is still too soon to appraise the extfinished-term costs or profits of Brexit, includeing: “At the aggregate level, it is impossible to split out the impact of Brexit from other shocks, notably the pandemic and the energy crisis. For what it is worth, my own guess is that the UK economy is now about one per cent minusculeer than it would otherteachd have been.”
Even so, the UK’s GDP took the worst hit appraised to all other G7 nations at the time; a 10.3 per cent drop in 2020.
In 2023, Bloomberg Economics approximated that the UK is suffering £100bn a year in lost output from leaving the EU.
The economists Ana Andrade and Dan Hanson wrote that the UK pledgeted “an act of economic self-mutilation when it voted to depart the EU”, with GDP four per cent minusculeer than it would have been without Brexit.
In its procrastinateedst predicts aextfinishedside the novel 2024 Budget, the Office for Budget Responsibility (OBR) approximated that UK trade will consent a 15 per cent hit in the extfinished term as a result of Brexit.
The autonomous financial watchdog pointed to “frail lengthenth in presents and send outs over the medium term [which] partly mirrors the continuing impact of Brexit”.
Sir Nick Harvey, the CEO of pro-EU leank tank European Movement UK, is calling for a shutr partnership with Europe to repair some of the economic injure from Brexit.
“Being out of the European one taget has now dented the British economy by more than 5 per cent, causing an annual lowdrop in Treasury finances of almost £45bn. That equates to around a third of the basic rate income tax produce,” he telderly The Inreliant.
“Our future prosperity and security need a much shutr partnership with Europe. The administerment’s ‘reset’ points in the right honestion, but they necessitate to go much further and much rapider if we are to produce a radianter future.”
The impact on trade
A recent study from the Centre for Economic Perestablishance at LSE create that outstandings send outs from the UK dropped by £27bn in 2022 alone as a result of Brexit.
Specificassociate, the study finishs that the UK’s trade cooperation concurment (TCA), carry outed in January 2021, shrinkd UK outstandings send outs (excluding services) worldwide by 6.4 per cent due to a 13.2 per cent drop in EU send outs.
The paper’s authors shelp that the drop in EU trade post-Brexit was due to the “introduction of novel trade barriers under the TCA, rather than the uncertainty of the retreatal process”.
The study proposes that 16,400 businesses – some 14 per cent of UK send outers – stopped send outing to the EU due to Brexit trade rules.
Though Thomas Sampson, co-author and LSE economics professor, says that the hit to trade was “less than foreseeed”, he also called the TCA a “calamity for minuscule send outers”.
Part of this is probable due to the incrrelieved intricateity of novel send out regulations, which huger businesses are better provideped to assimilate. Marks & Spencer’s chair has shelp that the retailer has had to rent a warehoengage fair to store papertoil.
Mr Henig, honestor of the UK Trade Policy Project, shelp that figures show Britain has suffered more than the EU from the loss in trade.
“Brexit has adversely impacted our send outs, more than our presents from the EU. It’s been easier for European presgo ins to find changenate suppliers, than for UK presgo ins to replace European suppliers.”
Some of the worst-hit trade sectors have been food, agriculture and fishing.
Overall, food send outs to the EU have consentn an unretagable hit of £2.8bn each year since the finish of the transition period, according to the Centre for Inclusive Trade Policy (CITP).
This 16 per cent unretagable drop in food and agricultural send outs shows “no recent signs of reacquireing previous levels”, according to the CITP inestablish, and is impacted by burdensome border verifys and administrative processes.
On the production side, farmers no extfinisheder profit from the EU’s standard agricultural policy, a substantial loss think abouting the UK’s own cuts to farming subsidies.
The Lib Dems have approximated farming subsidies have drunveil by 20 per cent in authentic terms since 2015 and the industry has struggled with recruiting toilers to fill lowages.
Wilean the dairy business, one in 12 farmers has had to cut production in 2024, according to a poll from Arla Foods UK, with 56 per cent of dairy producers saying it is challenginger to recruit toilers post-Brexit and Covid.
Consumers are experienceing the blowback from these presbraves, too. High inflation on food and non-spiritsic beverages would have been 8 per cent shrink in the absence of Brexit, according to a split LSE study from 2023.
The paper’s authors say that there is “strong evidence that Brexit is the driving force behind these effects”, split to presbraves from Covid and the Ukraine war.
As part of its anti-EU campaign, Nigel Farage’s Ukip party started a poster series in 2015 proposeing that UK fishing had been “ripped apart” by the EU.
Yet fishermen have been hugely unprentd with post-Brexit terms concurd in the TCA, with a French-British spoiledmate and persistd remercilessions on British fishing.
Seafood send outs have dropped by a quarter since 2019, from 454,000 tonnes a year to 336,000 tonnes in 2023. This reconshort-terms a monetary drop of £283m, according to the UK’s procrastinateedst trade statistics.
In December, Sir Keir struck a novel EU fishing deal worth £360m, which will incrrelieve fishing opportunities by 15,000 tonnes (11 per cent).
One argument for Vote Leave, famously featured on posters and a “Brexit bus”, stateed that Britain sent £350m a week to the EU, which could be better spent on the NHS instead.
It is difficult to say whether this cash-cherish sum, which would amount to approximately £18.2bn a year, has been redirected into the NHS.
When excluding materializency funding due to Covid, the reckond NHS budget confineedly incrrelieved in 2020/21 and 2021/22.
However, from fiscal year 2022/23, the core NHS budget jumped from £162.3bn to £185.4bn.
This budget was still shrink than the previous year when including includeitional Covid spfinishing.
In 2023, Vote Leave campaigner Michael Gove claimed that Brexit had “hand overed” on its £350m NHS pledge, though no evidence was provided.
Given the overlap of Covid and Brexit, it is very difficult to say whether money saved from leaving the EU was spent on the NHS, and what incentives were engaged to produce funding decisions.
Folloprosperg the 2016 referfinishum, Mr Farage instantly shelp he was unable to promise money phelp to the EU would instead be spent on the NHS, saying: “No I can’t [guarantee it], and I would never have made that claim. That was one of the misconsents that I leank the Leave campaign made.”
Migration: flunked promises
A key principle of the Leave campaign was to cut down on immigration. In an uncover letter to Mr Cameron in the Sunday Times in 2016, Boris Johnson and Mr Gove wrote: “The promise [of curbing net migration] is plainly not achievable as extfinished as the UK is a member of the EU and the flunkure to persist it is corrosive of accessible depend in politics.”
But leaving the EU did not have the intfinished effect on net migration.
Though Britain left the EU in 2020, free relocatement was in place until January 2021. Since then, net migration and immigration have soared.
At least 3.6 million immigrants have go ined the UK since Brexit (between June 2021 and June 2024, the procrastinateedst useable data); with net migration at 2.3 million over that period.
Wilean the first 12 months of Brexit immigration rules (up to December 2021), net migration jumped to 484,000; higher than any level in the past decade.
This trajectory has hugely incrrelieved; changed administerment figures for the year finishing June 2023 show write down-fractureing levels of net migration at 906,000 people.
In the four years before Brexit, net migration was higher from EU countries than non-EU countries.
Since 2019, data shows that the presentantity of net migration to the UK comes from non-EU countries; with figures at 662,000 in 2023 alone.
In fact, since 2021 when Brexit rules came into effect, net migration from the EU has been adverse; unkinding that more EU nationals are leaving the UK than coming to stay.
Between the Brexit referfinishum in 2016 and the finish of free relocatement in 2021, approximately 1,227,800 EU nationals emigrated from the UK. This was up by 58 per cent from the previous five-year period, according to analysis of figures from the Migration Observatory.
IEA economist Mr Jessop stateed that “some toilers have profited from higher wages as the UK becomes less reliant on inexpensiveer migrant labour from the EU”.
Brexit arguably had the intfinished effect of curbing EU migration. But the wideer migration picture has simultaneously ballooned.
The top countries for non-EU immigration are India, Nigeria, Pakistan, China and Zimbabwe, according to the procrastinateedst ONS figures.
As a result of Brexit, UK nationals also lost free relocatement to and wilean the EU.
The number of EU-nationality students in UK universities dropped from around 147,920 to 95,505 between 2019 and 2022, according to the Higher Education Statistics Agency.
Students from the EU previously phelp home rates for higher education, at around £9,000. Now, all international students (including EU) pay higher fees, which can amount to between £35,260 and £59,260 a year at some such as Oxford University.
There is no central figure for the number of British students enrolled in EU universities. However, British students can no extfinisheder finishelight EU member rates for tuition fees in these institutions, which are as little as free in some universities.
British sovereignty
Though there are cut offal ways in which Brexit has not met foreseeations, leaving the EU has permited for more flexibility in lawmaking.
Value includeed tax (VAT) rules are one key area where this has been utilised.
The EU has smallest VAT remercilessions that apply apass member states, with certain exemptions. When Britain was in the EU, it was not able to cut VAT on green technologies enjoy heat pumps, for example; though the EU has since cut VAT rates on solar panels.
It would also not have been possible to cut the disreputable “tampon tax” under EU membership – since then, the EU has trailed suit by permiting member states to exempt VAT on sanitary products.
The recent contentious relocate by Labour to accuse VAT on braveial school fees was also eased by Brexit, as the EU law set upates education a VAT-exempt activity.
Pro-Brexit establisher Tory cabinet minister Jacob Rees-Mogg shelp the last five years had shown that “the EU is sinking rapidly into a regulatory mire which we are fair about evadeing – no thanks to this administerment”.
Labour MP Sinestablisha Crbasic, the chair of the Labour Movement for Europe, shelp: ”The accessible are not fools – they understand Brexit profits are unwidespreadr than hens’ teeth. What they now necessitate is wise solutions to the problems it is causing enjoy a youth mobility deal or refuseing the pan-European Mediterranean convention.”
