No growth and less trade: Five yeas later, Brexit is a ‘flop’ for London

Brussels -Better alone than in bad company. They must know the well-known saying even across the Channel, where people have decided to say goodbye to the European Union for a brighter future that never occurred, however. Here, the well-known saying shows its limits, summed up in the numbers also certified by the Office for Budget Responsibility, the public body funded by the British Treasury. Less growth, productivity, and trade: this is the post-Brexit UK, five years after its ‘new independence.’

The OBR analysis certifies that having left the single market has not been an advantage. On the contrary, “​exports and imports will be about 15 percent lower in the long run than they would have been had the UK had remained in the EU.” This is due to costs to customs in the form of new duties and long lead times for new goods controls triggered by Brexit. Moreover, the freedom to independently determine trade policies has resulted in the inability to be truly innovative.

“The new trade agreements with non-EU countries will not have a material impact, and any effect will be gradual,” the UK Office further stressed. “This is because the agreements concluded to date replicate (or ‘renew’) agreements from which the UK has already benefited as an EU member state.” In addition, the new EU-UK Trade and Cooperation Agreement (TCA) that entered into force on May 1, 2021, “will reduce long-term productivity by 4 percent compared to remaining in the EU.”

Where the UK gains from Brexit is immigration: estimates show that the government’s new regime could reduce net inward migration — provided this is an advantage for the British economic and productive system. London’s National Institute of Economic and Social Research notes that due to Brexit, labor shortages have “strained the UK economy.” Whereas before the exit from the EU, businesses could easily meet their labor needs through the EU’s integrated labor market, following Brexit, critical sectors such as agriculture, health care, and catering have encountered labor shortages, resulting in higher operating costs and production constraints.