Sunday, January 05, 2025
The true cost of Brexit
He went on to quote from a separate article in the Telegraph on 26 June 2016 in which Boris Johnson claimed: 'British people will still be able to go and work in the EU, to live, to travel, to study, to buy homes and settle down. There will continue to be free trade and access to the EU single market.'
The reality has been very different of course, a fact that is made very clear in this aricle in the Independent. In a mirror of Stewart's writing they say that Brexiteers promised a new age of British sovereignty, a crackdown on migration and the much-derided “£350m a week” that could be diverted from the EU back into the NHS, but half a decade on, Brexit appears to have missed the mark:
The cost of Brexit is still being determined, but the government watchdog estimates that the economy will take a 15 per cent hit to trade in the long term, while experts suggest that the UK has suffered £100bn in lost output each year.
Since Britain left the EU, migration has been at the highest levels since records began; while key sectors face staffing shortages.
And almost six in 10 Britons (59 per cent) think that Brexit has gone fairly or very badly, with just 12 per cent believing it has gone well, according to a YouGov poll in October.
UK trade expert David Henig told The Independent: ”The UK now has significant trade barriers to its neighbours. It’s something we will have to live with. We will not be allowed to forget it; there will always be issues.”
Brexit-optimist economist Julian Jessop, a fellow at the Institute of Economic Affairs, admitted that Brexit has made it harder or “impossible” for small businesses to adjust.
“The UK’s departure from the EU has undoubtedly had some negative effects on the economy, notably through reductions in trade, shortfalls in business investment, and disruption to labour markets,” he told The Independent.
However, he added that the “overall drag on exports and imports has been much smaller than feared”.
Former deputy prime minister Lord Heseltine said that nearly five years on, Brexit “has been a historic disaster”.
“It has destroyed Britain’s leadership in Europe just at a time when there was a critical need (for it), it has closed off opportunities for the younger generation to share in the benefits of Europe and it has denied Britain’s industrial base access to the research and policies of Europe. Our economy is much worse because of it and there is no reputable authority that denies this.
“I think the British people know that they were deceived and the deceit is measured in reduced living standards,” he added.
The latest Treasury estimates show that the cost of Britain’s settlement with the EU stands at approximately £30.2bn in total. This is separate from any estimates of lost money from separating from the EU.
As of the start of 2024, the bulk of this settlement (£23.8bn) had already been paid. Approximately £6.4bn still remained to be paid out to the EU in 2024 and onwards.
The government has not yet published the figure to the end of 2024.
The article is detailed and extensive, many of the statistics it relies on are contained in the paper's front page, reproduced at the head of this blogpost, but I have pulled out a few headlines.
The paper says that in 2023, Bloomberg Economics estimated that the UK is suffering £100bn a year in lost output from leaving the EU, while a recent study from the Centre for Economic Performance at LSE found that goods exports from the UK dropped by £27bn in 2022 alone as a result of Brexit. The study suggests that 16,400 businesses – some 14 per cent of UK exporters – stopped exporting to the EU due to Brexit trade rules.
And on the core pledge to put an extra £350m a week into the NHS, the paper points out that from fiscal year 2022/23, the core NHS budget jumped from £162.3bn to £185.4bn, however this budget was still lower than the previous year when including additional Covid spending, and that 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 used to make funding decisions.
Finally, on immigration and the claim by Gove and Johnson that curbing net migration is not achievable as long as the UK is a member of the EU, it is apparent that leaving the EU did not have the intended effect on net migration.
The paper points out that at least 3.6 million immigrants have entered the UK since Brexit (between June 2021 and June 2024, the latest available data); with net migration at 2.3 million over that period. Net migration is more than double its pre-Brexit average.
Read the article in detail for the full picture.
