Happy Fifth Anniversary, Brexit! Or is it? Believe it or not, it has been 5 years to the day since Britain severed political ties with the European Union, on January 31st 2020 (and four years since it left the European single market and customs union).
So, how has that gone?Not that well, it seems, although maybe not quite as disastrously as I might have predicted.
Setting aside the way in which it has divided British society, setting family members and long-standing friends against each other in acrimonious political dispute, Brexit's effect on Britain's trade has been generally negative, economists agree, but not entirely so.
Exports of goods are substantially down, as expected, although different studies disagree as to how much (6%? 30%?), with smaller companies being disproportiately affected. But exports of services from the UK (advertising. management consulting, information technology, etc) are up, a lot. Overall, the Office for Budget Responsibility estimates that the UK's economy has taken about a £100 billion hit.(about 4%) as a result of Brexit.
On immigration, a major plank of the Brexit campaign, results have also been mixed. Net immigration from Europe has indeed fallen a bit, but immigration from the rest of the world has increased by a lot more. So, net immigration has actually increased, by quite a lot!
Travel in and out of the UK/EU has not changed that much, although plans to introduce ETA/ETIAS permits to later this year will make the administration even more burdensome and expensive, in both directions, and this may (or may not) have a dampening effect on travel.
Likewise, Brexit was supposed to give the UK much more independence in the laws it can pass. But thousands of "retained EU laws" were passed in the UK just after Brexit announcement. And only a small proportion of those (mainly small obscure regulations, at that) were repealed by the various Conservative governments, so UK law actually still reflects EU law pretty closely.
And has Brexit actually saved the UK bags of money, as the Leave campaign promised? Yes, around £18 billion a year in public sector contributions to the EU are no longer being paid out. But, at the same time, £5 billion a year in agricultural funding from the EU has stopped, and $4 billion a year in "rebates" on EU Budget contributions further whittles down the annual saving to around £9 billion. Add to that £21.3 billion in official Brexit Withdrawal Agreement payments to the EU, and the UK has hardly seen any overall savings yet, although that may yet start to materialize in the years to come (there are still many unknowns involved).
For example, after Brexit, the UK did stop paying into the Horizon pan-European scientific research scheme, from which it used to be a net beneficiary, in terms of science grants, etc). But in 2023, it decided to re-join the scheme, even though it is now a net payer to the tune of about £2 billion a year.
So, as ever in politics, nothing is ever simple, certainly not as simple as populists like Boris Johnson and Nigel Farage assured the British public. And now, with a more conciliatory Labour government in power, the future may be even more difficult to predict.
