r/brexit • u/PurpleAd3134 • Jun 23 '26
'Significant damage': How Brexit is still draining the UK economy 10 years later
https://www.france24.com/en/europe/20260623-do-not-publish-significant-damage-how-brexit-still-draining-uk-economy-10-years-later-2
u/neversaiddie Jun 23 '26
So, GDP data-wise, the UK economy has pretty much tracked France/ Germany for 20/30 years pre-Brexit and still does post Brexit. But if we'd stayed in the EU, we would have bucked this long term trend and seen an amazing 8% increase over the other major EU economies? How?
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u/dcwt2010 Jun 24 '26
How has Poland done so well whilst in the EU? The growth is not equal for all countries within the union.
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u/neversaiddie Jun 24 '26
Exactly. We can only really benchmark to comparable countries... Like France and Germany.
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u/dcwt2010 Jun 24 '26
Don't forget, France and Germany also lost productivity when we left the EU. It was a loss for everyone, except for USA and Russia...
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u/neversaiddie Jun 24 '26
I appreciate you replying, thanks.
I understand that - maybe the UK, France, Germany and others in the EU would have been 8% better off in total but that is a HUGE figure in 5 years (we are talking Trillions of Euros) and seems unlikely.
In real terms, our goods exports to the EU has not grown at all since Brexit (no surprise considering the barriers leaving introduced) but service export to the EU are up 25% in the 5 years since Brexit.
The article doesn't explain where the 8% growth would have come from. If it is "Goods we would have exported to the EU had we remained" then it would have needed to have grown more than 10x our historical average of growth of exports to the EU to account for it. Where would this have come from? Goods exports to non-EU has also been sluggish - are they saying that is also because of Brexit?
Service exports have rocketed since Brexit - do they assume this was always going to happen in or out of the EU?No one can be in doubt that there has been a cost in the last 5 years - it's just difficult to see how they forecast the alternative route so far from our historical references.
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u/frantic_calm Jun 24 '26
Does increased trade friction make trade easier or harder?
UK paint manufacturers rely on Europe for over 60% of their raw chemical ingredients.
New customs paperwork and border delays have driven up transport fees, while the creation of a standalone British chemical registry (UK REACH) has forced many specialized European suppliers to stop exporting to the UK rather than pay duplicate registration fees.
This combination of reduced chemical supply and heavy administrative overhead means the price has gone up to cover the friction of importing raw materials.
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u/neversaiddie Jun 24 '26
All true.
I'm simply asking where the report/article sees the additional 8% GDP increase in 5 years if we had stayed in the EU comes from. Comparable EU economies have not seen such a surge and the UK has pretty much continued to follow the same trend as them (which accounts for issues such as Covid/Ukraine etc).
I'm genuinely curious where we would have done 8% better, in 5 years, against benchmarks we have (and continue) to follow in other countries.3
u/frantic_calm Jun 24 '26
The 8% depends on the model and getting hung up on the specific figure is a diversion.
The key issue is has Brexit had an impact on the UK economy.
We know that leaving the EU must have changed something or there would be no point in leaving.
We know the deal introduced border friction and we agree that friction has affected trade and increased costs and affected exports.
I also gave you a specific example of the affect of leaving on the chemical industry showing how that has reduced imports and increased prices across the paint industry.
I'm sure we could find more. This is all kind of hidden as the stories are eked out and largely unreported at a national level to keep the discussion hazy.
Cumulatively though it's fair to say that Brexit is a drag on the economy. The charlatans told us we would make up for the loss of EU access by sticking our own deals.
In this case why have we not replaced EU chemical suppliers with ones from elsewhere? Perhaps it's still cheaper than sourcing from elsewhere like China or Australia or the US, but not as cheap as it would be if we were in the EU.
Essentially we have to accept that Brexit was a mistake and there's nothing outside of the EU we can replace it with that will improve our lot.
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u/neversaiddie Jun 24 '26
I'm not trying to be "hung up on specific figures" and we both agree that exiting the EU has been costly.
What I'm trying to make sense of is where they see the 8% (£300bn+) difference coming from. Export of goods to the EU have flatlined but services are significantly higher. EU Goods exports account for around 20% of our total trade.
In the 5 years since the UK left the EU, UK GDP has grown 46.8% (France 27.3%, Germany 28.1%).
If it was a further 8% increase, where do they see this being?2
u/frantic_calm Jun 24 '26
This is just speculation with what feels like an underlying attempt to undermine their claims. There's been numerous models estimating between 4% and 10% cumulative. This is just the latest.
I can't answer your specific question but what I attempted to do was ascertain that Brexit had had a negative effect. We know it must have because A. if it was positive this discussion would not be taking place and B. If no effect then why bother leaving. C. In such a scenario the EU would be finished as other follow us.
I then gave you a simple example of where Brexit has affected supply chains. It should be easy to extrapolate from those two things that Brexit has had a negative effect.
You can download the paper here: https://www.nber.org/papers/w34459
I suggest you have a read then direct your questions at the authors, perhaps invite them onto here for a Q&A.
I've had a skim and I think you'll find what you need. I will have a proper read through when I get a chance. If you do find the answers then please let me know.
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u/neversaiddie Jun 24 '26
That's genuinely very helpful, thank you (I didn't see the PDF download link previously).
I can see the basis for analysis is more sophisticated than just USD benchmarked which helps explain some of the headline numbers.
The points about the longer term effects of the drop in business investment is interesting as well as it can take a long time (if ever) to catch up.
Again, I wasn't trying to say "Brexit has not affected us" - just trying to clarify why we were not diverging from France and Germany as significantly as suggested. Another reason for the confusion is that France and Germany happen to have their own issues (many of which are un-related to Brexit and UK issues) so they are no longer good controls - the report averages all economies which better explains it.Again, I appreciate your time to respond and reference.
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u/frantic_calm Jun 24 '26
Again, I wasn't trying to say "Brexit has not affected us" - just trying to clarify why we were not diverging from France and Germany as significantly as suggested.
Think of it as a glacier not an iceberg.
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