In the run-up to the 2016 referendum, Conservative campaigners sold Brexit as the answer to all of the country’s problems. Leaving the EU would transform the UK’s economic prospects, making us all richer. It would free up money to spend on the country’s public services, most notably the NHS. It would restore control over the country’s immigration system, helping to reduce migration levels.
Four years after Britain left the EU, and this Brexit manna is still yet to transpire. Little surprise: the campaign for Brexit remains perhaps the most dishonest political movement this country has ever seen. It is true that the referendum result itself did not push the UK into recession as then-chancellor George Osborne predicted. But none of the false promises has materialised. Brexit has left the UK poorer in the long term, and the deal negotiated by Boris Johnson pushed Northern Ireland into a damaging political stasis. Of course that has not stopped the government claiming it has been an unrivalled success. Last week, the Department for Business and Trade published what can only be described as political propaganda, consisting of cherry-picked statistics to create the illusion that four years on, Brexit has delivered nothing but benefits.
This document reflects the depressing reality that today’s Conservative party is very much the political successor of the official campaign to Vote Leave, which lied to voters that Brexit would not involve painful trade-offs, engaged in a “clear misuse of official statistics” for deploying the false claim that leaving the EU would free up £350m a week for the NHS and which implausibly suggested that staying in the EU would mean sharing a border with Syria and Iraq. We are to believe that the UK’s economy has been re-engineered for the better because of a collection of free trade deals, the vast majority of which simply replace those the UK had access to via the EU anyway: the UK’s accession to the trans-pacific partnership, estimated by the government to be worth only 0.06% of GDP by 2040; and a handful of “global trade wins” that include greater access to the Mexico market for pork producers, and improved access to the Chinese beauty market, which has nothing to do with Brexit according to the British Beauty Council, and is far outweighed by the £850m it says the beauty industry has lost as a result of leaving the EU.
In presenting such an incomplete picture, this official government document is highly misleading. It is the most basic of economics that you cannot evaluate the impact of a policy like Brexit on a country’s economy without looking at both its costs and its benefits; to list only one side of the balance sheet is worse than useless. The overall impact of Brexit on the economy has been to make us much poorer. Analysis from the National Institute of Economic and Social Research estimates that at the end of last year, GDP was between 2% and 3% lower than it would have been had the UK not left the EU; the equivalent of an £850 per person loss in national income, rising to £2,300 per capita by 2035. Erecting trade barriers with our biggest and closest trading partner to chase free trade deals with smaller economies on the other side of the world could never pay off. Moreover, levels of business investment are down 30% compared with its pre-referendum trend.
This is an impoverishment the UK can ill afford. While government ministers go on the airwaves to trumpet partial statistics celebrating British economic success, the reality of people’s wages and household incomes tell a different story. Analysis from the Resolution Foundation shows that real wages will be no higher in 2024 than they were in 2006, a terrible tale of stagnation. External factors like the war in Ukraine have contributed to rising energy bills and food prices, but Brexit has not only made household incomes less resilient to these shocks, but through its impact on the levels of the pound, has itself acted to drive up inflation.
This is quite apart from the impact Brexit has had on governance in Northern Ireland. Brexit is not the only destabilising influence but has unquestionably contributed to the tensions that led to the collapse of the Northern Ireland executive between 2017 and 2020, and again from 2020 until just this last week. The latest reimagining of the border checks in the Irish Sea necessitated by Brexit has led to the restoration of power sharing which was sealed yesterday. But with some issues still unresolved, there is no guarantee that this deal will sustain it for the long term. Meanwhile, net migration has continued to increase since Brexit as a matter of economic necessity, not least to fill urgent staff shortages in the NHS and care system.
The Tories’ Brexit populism was never going to win them long-term success at the ballot box because their promises were built on sand. A poll last week found 57% of people think Brexit has been more of a failure; just 13% think it has been more of a success. But whether or not the public blames Brexit for the state of the economy, the polls suggest voters are prepared to hold the government accountable for the cost of living crisis and the state of the NHS. Ministers are unlikely to escape their complicity in misleading the public and inflicting economic pain on the country; but not before they have wreaked untold damage to the UK’s long-term interests.
• This article was amended on 4 February 2024. It was the Department for Business and Trade that published a report on the fourth anniversary of Brexit, not the “Department of Trade and Industry”, a name not used for that ministry since 2007.
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