Damage From Brexit Is Only Getting Worse As Time Goes On, Economists Say

The impact on UK businesses from Brexit’s red tape is only getting worse as time goes on, a new report has found.

According to Aston University Business School, the value of UK goods exported to the UK was 27% lower – and imported goods 32% lower – compared to what the economy may have looked like if Brexit had not happened.

Leaving the single market officially in January 2021 has had a “profound and ongoing” impact on Britain’s trade with the EU, according to the economists’ modelling.

The variety of exported goods has also declined, with 1,645 fewer types of British products sent to every EU country and many manufacturers no longer sending their produce to the bloc.

Trade with smaller states further from the UK have been most impacted, the authors found.

Workers in farming, clothing, wood and paper manufacture have particularly struggled with the post-Brexit red tape, as they grapple with the new time-consuming safety checks and extra labelling requirements. 

In fact, annual exports to the EU are now 17% lower while imports are 23% lower than they would have been if the UK had not left the EU.

The report also suggested the impact is only getting more severe as time goes on, rather than levelling out, as the authors spotted a “noticeable worsening of EU-UK trade” in the last year.

“The negative impacts of the [agreement] have intensified over time, with 2023 showing more pronounced trade declines than previous years,” the report said.

“The findings reveal a sharp decline in both UK exports and imports with the EU, underscoring the enduring challenges posed by Brexit on the UK’s trade competitiveness,” the report said.

But it’s not entirely bad news.

The findings, which explore the three-year period after the 2020 Brexit trade deal was signed, do not include the service sector, which has exceeded performance expectations.

Exports of tobacco, railway and aircraft goods have also increased.

Even as separate polls suggest support for life outside the EU is falling among Brits, the new Labour government says it will not try to rejoin the single market or form a custom union, but it has promised to rebuild some ties with the bloc.

A government spokesperson said it would “look forward, not backward”.

They added that Labour will “work to improve our trade and investment relationship with the EU and tear down unnecessary trade barriers while recognising that there will be no return to the single market, customs union or freedom of movement”.

The government is said to be considering a veterinary agreement to reduce border checks on plant and food products and a deal to improve access for touring musicians.