LONDON, Feb. 1 (Xinhua) — This January, three years after its departure from the European Union (EU) in 2020, Britain still suffers from division with parliament members continuing to pressure the prime minister on Brexit’s consequences during their weekly conventions.
“It’s clear that Brexit and its hold over British politics remains strong,” noted Sophie Stowers from the academic network UK in a Changing Europe. “Britain has been split into two distinct camps: ‘Leavers’ and ‘Remainers’.” Brexit chaos has shown no sign of stopping. The divorce has turned out to be long and unpleasant, full of quarrels and distrust, both inside Britain as well as between it and the bloc. As much evidence has shown, the British economy has suffered much, and frustration has grown over the unfulfilled promises. Worse yet, no quick solution is in sight.
ECONOMIC TOLL
“There’s now a reasonable consensus that the effects of Brexit on the UK economy have been negative,” Professor Iain Begg from the London School of Economics and Political Science (LSE) told Xinhua. “It’s more an incremental, small, bit-by-bit, drip-by-drip effect on the British economy. But it’s mainly been in one direction of being negative.” Evidence abounds that both households and businesses have been hit hard. Brexit added an average of 210 pounds (258.4 U.S. dollars) to household food bills in the EU over the two years to the end of 2021, and cost British consumers a total of 5.8 billion pounds (7.1 billion dollars) with higher food bills, research from the LSE Centre for Economic Performance showed in December 2022. “And since low-income households spend a greater share of their income on food than richer families, these Brexit-driven price rises had a proportionately greater impact on the poorest people,” the study added.
Companies have also felt the blow. Nearly half of businesses still found Brexit challenging, while only a third could envisage opportunities materializing from Brexit, a report published by the Institute of Directors in November 2022 showed.
Businesses said that they have lost clients as a result of Brexit, and that they have had to divert supply chains and relocate to the EU to keep trading, said the report, noting that EU firms are pulling out of Britain as an export market because of the barriers. “Businesses feel they are banging their heads against a brick wall as nothing has been done to help them,” said Shevaun Haviland, director general of the British Chambers of Commerce.
“The longer the current problems go unchecked, the more EU traders go elsewhere, and the more damage is done.”
Brexit has inevitably led to tax rises as well, because a slower-growing economy requires higher taxation to fund public services and benefits, said deputy director John Springford at the think tank Centre for European Reform. If Brexit had not happened, he added, most of the tax rises that the government announced in March 2022 would not have been necessary. A report published by the think tank Resolution Foundation in June 2022 found that since 2019, Britain had experienced a sharp decline of 8 percentage points in trade openness, or total trade as a share of GDP.
It’s estimated that labor productivity will be reduced by 1.3 percent by the end of the decade due to changes in trading rules alone. While the debate on the impact of Brexit has implied a one-off shock, adjustment will be gradual and create a lasting impact on Britain’s competitiveness and productivity over the coming decade, the report noted.
BROKEN PROMISES
One of the illusory promises of Brexit was it would enable Britain to cut quick-and-easy trade deals, but this has not happened with the EU, by far its largest partner, nor with the United States, said John Kampfner from the policy institute Chatham House in a December 2022 article. “Considerable effort, and resource, has been expended on devising an independent trade policy. Once again, the results are limited,” Kampfner noted. “Much of Brexit’s Global Britain dream was based on reviving deeper relationships with the Commonwealth. Again, this is proving harder than originally envisaged.” The reality is that the vast majority of the 71 deals reached since Brexit are rollover agreements with countries that already had trade agreements with the EU, according to researcher Stephen Hunsaker at the UK in a Changing Europe in January. Even though the existing UK-Japan agreement was slightly modified, analysts cautioned that it will provide no net gain compared to the EU-Japan deal, Hunsaker added. Also, migration was quite a big deal in Brexit debates, but two years on from the end of free movement, the level of net migration certainly has not fallen, said Torsten Bell, chief executive at the Resolution Foundation.
Statistics show net migration continued to add to the population in the year ending June 2022, with an estimated 504,000 more people arriving long-term to the UK than departing. “EU migration has decreased sharply, while there has been a substantial increase in non-EU migration. Combined with other factors, this has led to migration overall running at record levels,” said a report published by UK in a Changing Europe in January. “The new system has seen increases in work visas in the health sector, and some other high-skilled service sectors, while other sectors, such as hospitality, which were previously more dependent on EU workers, are seeing labour shortages,” it added. Regrets have been growing. The number of Leave voters who think it was wrong for Britain to vote to leave the EU has been steadily increasing since 2021, hitting a record 19 percent in November 2022, YouGov data showed, identifying the top reason as “just a general sense that things have gotten worse since Brexit.” Simon Wolfson, chief executive of the retailer Next, called for more foreign workers in Britain during a recent media interview. It is “not the Brexit I wanted,” said the Brexit supporter.
CONTINUED CHAOS
A dispute over the Northern Ireland Protocol, the rules governing post-Brexit trading arrangements for Northern Ireland, has strained Britain’s relations with the EU, even stoking worries of a trade war. Tension grew when the British government in June 2022 introduced a bill to unilaterally change parts of the protocol, which the EU said was not acceptable. Under the protocol, Northern Ireland is part of British customs territory but is subject to the EU’s customs code, value-added tax rules and single market rules for goods. However, a de facto Irish Sea border was thus created between the British mainland and Northern Ireland, meaning goods transported to and from Northern Ireland are subject to border controls. This has elicited firm opposition from Northern Ireland’s pro-Brexit Democratic Unionist Party, which has demanded the removal or replacement of the protocol as a precondition for it to sit in the assembly and form a devolved government. Political chaos has continued.
The British government’s approach to resolving the problems with the protocol has been counterproductive and has further undermined trust, said Hilary Benn, the Labour Member of Parliament for Leeds Central, in September 2022.
“One of the most striking features of Brexit is that those who argued most strongly for it appear unwilling to take any responsibility for its consequences. Nowhere has this been demonstrated more clearly than in the case of the Northern Ireland Protocol,” Benn noted.
More recently, with efforts to heal the rifts, progress was made in Britain-EU talks. Nevertheless, gaps remained, and analysts expect a long road ahead for the two sides to settle their disputes. The future of the relationship will depend on political will on both sides, which is far from guaranteed, said the UK in a Changing Europe report in January. “What seems clear, however, is that the relationship is far from settled. Brexit will not be ‘done’ for a while yet.”
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