We’ll say it: No country would vote for this again. The UK continues to lick its Brexit wounds, and new research from the Centre for Economic Performance (CEP) at the London School of Economics (LSE) shows the flaws of our extremely raw deal.
ALSO READ: Laughter across Parliament as Badenoch defends ‘hard-earned Brexit freedoms’
LSE study exposes the true cost of Brexit
Elected on the premise of ‘getting Brexit done’, Boris Johnson forced-through the divorce process. He called it an ‘oven-ready deal’, but these new figures show just how undercooked the final Trade and Cooperation Agreement really was.
As explained by the CEP’s findings, Brexit cost the UK exports sector an estimated £27 billion in the first 12 months. If the Labour Government are still looking for the source of the financial ‘black hole’ they inherited, look no further…
“The Trade and Cooperation Agreement (TCA) reduced total goods exports from the UK by an estimated £27bn in 2022. Around 16,000 firms that had previously exported to the EU stopped doing so after the TCA came into force in January 2021.“
“Among firms that continued exporting to the EU, the TCA reduced the average value of EU exports by 30 per cent for the smallest fifth of firms (with six or fewer employees) and by 15 per cent for the middle fifth (between 17 and 40 employees).” | CEP/LSE
Brexit trade deal had ‘bigger impact’ than referendum result
Thomas Prayer, co-author and Associate of CEP’s trade programme, highlights that the worst of the damage from Brexit only occurred years after the referendum result – when the TCA was signed by all parties.
“After the referendum, there was no change in firms’ trade with the EU until the TCA came into effect. It was the introduction of new trade barriers under the TCA, rather than the uncertainty of withdrawal, that reduced trade with the EU.” | Thomas Prayer
Exports to EU fall off a cliff for small, medium-sized businesses
So that’s a multi-billion pound loss in one year, a 30% reduction in exports for the UK’s smallest firms, and thousands of operators who simply stopped doing businesses with the nearest available trading bloc. Needless to say, that doesn’t look good on a graph.
Using the CEP numbers, this chart from the Financial Times shows how export figures plunged in 2022, and have since failed to recover to pre-Brexit and pre-TCA levels. At this rate, Labour might need to seek something more than a ‘reset’ with the EU…