UK counts the cost: £100 billion annual Brexit losses loom
On 31 January 2020, Brexit occurred. The United Kingdom left the European Union as a result of the 2016 referendum. The losses caused by Brexit amount to up to £100 billion annually, and GDP is expected to drop by 4%, writes "The Independent."
In the autumn of last year, the Secretary of State for Economy in the UK Treasury, Tulip Siddiq, warned that 60% of the economic impacts of Brexit had yet to be realised.
Siddiq referred to forecasts from the Office for Budget Responsibility (OBR), according to which in the long term, the British economy will shrink by 4% due to Brexit. Meanwhile, foreign trade will be 15% smaller than it would have been if the United Kingdom had remained in the EU. Researchers from the London School of Economics also estimated that Brexit hit citizens' wallets. The barriers to importing food from the EU alone led to increased bills by an average of £250.
Brexit hit the economy
The referendum on the United Kingdom's exit from the EU was conducted in 2016. Nearly 52% of voters supported leaving the community, with the biggest opponents of the EU being the English and the Welsh. The Scots and the Northern Irish voted to remain in the EU.
Formally, Brexit took place on 1 February 2020. Since then, many institutions, including the government, have examined how the separation from Brussels has affected the British Isles. Now "The Independent," citing Bloomberg Economics, reports that Brexit has led to losses of £100 billion annually.
Brexit also impacted trade. The export of goods decreased due to the restrictions from the Trade and Cooperation Agreement (TCA) between the EU and the United Kingdom. The newspaper points out that changes in the agreement from 2022 alone led to a drop in export value by £27 billion.
Economist Julian Jessop, who was optimistic about Brexit, also emphasised that leaving the EU primarily affected small businesses.
Jessop, as reported by The Independent, pointed out that the UK's exit from the EU has clearly harmed the economy, notably through reduced trade, decreased business investments, and labor market disruptions.
Meanwhile, former Deputy Prime Minister Lord Michael Heseltine declared that "Brexit is a historic disaster." In his opinion, "the UK's leadership was destroyed," and the economy is in worse shape without any reputable authority able to deny it.
Brexit primarily negatively affected three sectors: food, agriculture, and fisheries. According to the Centre for Inclusive Trade Policy (CITP), food exports to the EU dropped by an average of £3 billion each year since the end of the transition period. Meanwhile, a survey conducted by Arla Foods UK shows that one in 12 farmers in the dairy sector had to reduce production in 2024, and 56% of milk producers say that post-Brexit and during the Covid-19 pandemic, it became harder to recruit workers.
Additionally, seafood exports have fallen by a quarter since 2019 - from about 460,000 tonnes annually to 340,000 tonnes in 2023. According to "The Independent," these are "striking statistics."
Migration did not weaken
Brexit supporters claimed that leaving the EU would reduce migration. However, this did not happen - quite the opposite.
According to The Independent, Brexit led to an unprecedented rise in net migration to the United Kingdom. Despite new immigration policies, the flow of newcomers has continued, casting doubt on previous assurances. Additionally, a considerable segment of the population views Brexit as a misstep.
The newspaper adds that at least 3.6 million immigrants arrived in the UK between June 2021 and June 2024. Meanwhile, net migration (the difference between the number of immigrants and emigrants) amounted to 2.3 million during this period. In the first 12 months of Brexit immigration regulations being in force (until December 2021), net migration rose to 484,000. This was the highest level in the past decade.
Law and regulations after Brexit
Leaving the EU, however, allowed the British to introduce changes in VAT regulations, which brought greater flexibility in fiscal policy. The new regulations allowed for the removal of the so-called "tampon tax" or the introduction of VAT on tuition in private schools (education in the EU is VAT-exempt). Since 2021, hygiene products - pads or tampons - are exempt from the 5% VAT tax.
However, not everyone shares the same dissatisfaction. Jacob Rees-Mogg, the former minister overseeing Brexit opportunities and government efficiency in the UK, expressed that the EU is mired in excessive regulations, a situation the UK has managed to evade.
