The Brexit effect: how leaving the EU hit the UK | FT Film

Summary

El 'mini' presupuesto es el clímax de las políticas económicas post-Brexit, priorizando la soberanía sobre el sentido económico. Con el Brexit, el Reino Unido no puede enviar nada a la UE, lo que se asemeja a un desastre. Los brexiteros no han presentado un argumento sólido sobre los beneficios del Brexit. Existe un consenso de silencio político sobre sus efectos, afectando a todos los partidos. El Brexit ha traído consecuencias económicas negativas en términos de precios, inversión y comercio, claramente separables de la crisis energética o la pandemia. La salida del Reino Unido de la UE es un acto de autopreservación económica, con efectos a largo plazo en la economía y la sociedad.

Takeaways

• 🇬🇧 La 'mini' Presupuesto fue el clímax de las políticas económicas implementadas desde el voto del Brexit, priorizando una idea particular de soberanía por encima del sentido económico.
• 🚚 El Brexit ha afectado negativamente al comercio, con el Reino Unido incapaz de enviar mercancías a la UE y enfrentando costes de transporte incrementados.
• 🤔 Los defensores del Brexit no han presentado un argumento convincente sobre cómo este traerá beneficios económicos a largo plazo.
• 😷 Existe un consenso de silencio político en torno a los efectos del Brexit, afectando tanto al gobierno como al Partido Laborista.
• 💔 La decisión del Reino Unido de abandonar la Unión Europea se considera un acto de autopreservación económica, con efectos negativos en precios, inversión y comercio.
• 📉 A pesar de la pandemia y la crisis energética en Ucrania, los efectos negativos en el comercio del Reino Unido son claramente atribuibles al Brexit.
• 💷 La salida del Reino Unido de la Unión Europea ha resultado en una versión 'hard Brexit', perdiendo acceso al mercado único y a la unión aduanera, lo que ha incrementado los costos.
• 📈 Otros países G7 han experimentado una recuperación comercial después de la pandemia, mientras que el comercio del Reino Unido ha sido básicamente plano.
• 🏭 Las PYMES del Reino Unido han tenido dificultades para adaptarse a la burocracia post-Brexit, lo que ha afectado su capacidad para crecer y expandirse.
• 🌐 El Brexit ha incrementado la burocracia y disminuido las relaciones comerciales, lo que ha afectado la inversión y el crecimiento económico del Reino Unido.

Q & A

¿Qué fue el 'mini' presupuesto y cómo se relaciona con las políticas económicas post-Brexit?

El 'mini' presupuesto fue el punto culminante de las políticas económicas implementadas desde el voto del Brexit, priorizando una idea particular de soberanía por encima del sentido común económico.

¿Cómo se ha visto afectado el comercio del Reino Unido con la Unión Europea después del Brexit?

El Reino Unido ha experimentado dificultades significativas para enviar bienes a la UE, llegando a un punto en el que no se podían enviar nada, lo que se ha descrito como casi desastroso.

¿Qué es la 'política de silencio' sobre los efectos del Brexit y cómo afecta a los partidos políticos en el Reino Unido?

Existe una conspiración de silencio política en torno a los efectos del Brexit que abarca al gobierno y al Partido Laborista, evitando abordar los negativos impactos económicos que ha traído consigo.

¿Cómo se describe el impacto del Brexit en términos de precios, inversión y comercio?

Se están observando efectos negativos en el Reino Unido en términos de precios, inversión y comercio, que no se deben a la pandemia o a la crisis energética, sino claramente a los efectos del Brexit.

¿Cómo se compara el Reino Unido con otras economías avanzadas en cuanto a la recuperación comercial después de la pandemia?

Mientras que otras economías avanzadas de los G7 experimentaron una recuperación comercial, la del Reino Unido ha sido básicamente plana, cayendo atrás en su intensidad comercial.

¿Qué ha pasado con las relaciones comerciales entre las pequeñas empresas del Reino Unido y sus contrapartes extranjeras después del Brexit?

Se ha registrado una disminución en el número de relaciones comerciales entre las pequeñas empresas del Reino Unido y sus homólogas en la UE, lo que afecta la forma en que las pequeñas empresas británicas solían crecer expandiendo su negocio en el mercado único europeo.

¿Cómo ha afectado el Brexit la burocracia y las pequeñas empresas en el Reino Unido?

El Brexit ha aumentado la burocracia, y muchas pequeñas empresas han luchado para adaptarse a los nuevos requisitos, lo que ha resultado en un impacto económico y operativo negativo.

¿Qué cambios se han observado en las inversiones de negocios en el Reino Unido desde el Brexit?

Aunque otros países miembros del G7 han experimentado un crecimiento en sus inversiones de negocios, el Reino Unido ha visto un estancamiento en este aspecto, lo que es preocupante para el futuro de su economía.

¿Cómo se ha manejado el tema del Brexit en el contexto de la crisis de personal en sectores como la construcción, la hostelería y el cuidado social?

El final de la libre circulación de personas debido al Brexit ha causado una crisis de reclutamiento en sectores clave, lo que ha sido un ajuste doloroso pero también una decisión política que ha reconfigurado la economía.

¿Qué es la 'leyenda del Brexit dividendo' y por qué ha sido difícil de materializar?

La idea de un 'dividendo del Brexit', que promueve la idea de que el Reino Unido puede tener una economía más ágil y deregulada, ha resultado en una realidad donde las ganancias económicas esperadas no se han materializado, y en su lugar se han duplicado los costos burocráticos y la complejidad para las empresas.

Outlines

00:00

🇬🇧 Consecuencias económicas del Brexit

El 'mini' presupuesto fue el clímax de las políticas económicas implementadas desde el voto del Brexit, priorizando una idea particular de soberanía por encima del sentido económico. Se describe la situación desastrosa de no poder enviar bienes a la UE y la falta de un argumento convincente por parte de los brexiteros sobre los beneficios del Brexit. Se menciona un consenso de silencio político en torno a los efectos del Brexit, afectando tanto al gobierno como al partido laborista. Se destaca que la decisión de salir de la UE ha traído efectos negativos en términos de precios, inversión y comercio, que no se deben a la pandemia o a la crisis energética, sino claramente al Brexit. Se relata la caída inmediata del pound sterling y cómo esto aumentó los precios de las importaciones y la inflación, afectando negativamente a los hogares británicos.

05:00

🚚 Impacto del Brexit en las empresas y el comercio

Se explora el impacto del Brexit en el sector empresarial, con casos específicos como Aston Chemicals, una distribuidora de productos de cuidado personal, y Hampstead, una empresa de té orgánico. Se describe cómo el Brexit ha incrementado los costos de envío y la burocracia, afectando negativamente la competitividad y la expansión de las empresas. Se relata la experiencia de Little Star Jewellery, que planeaba expandirse en Europa, y cómo el Brexit ha complicado sus operaciones comerciales. Se menciona la decisión de establecer una entidad en Europa para distribuir productos, lo que ha reducido la actividad económica en el Reino Unido. Se destaca la pérdida de negocios y la dificultad para las PYMES para adaptarse a las nuevas regulaciones comerciales post-Brexit.

10:01

📉 Disminución de la inversión y el crecimiento económico post-Brexit

Se discute cómo el Brexit ha afectado la inversión en el Reino Unido, comparando su rendimiento con otros países miembros del G7. Se menciona la introducción de la superdeductibilidad para incentivar la inversión en capital e innovación, pero se señala que esto no ha sido suficiente para revertir la tendencia. Se destaca la importancia de la inversión para el crecimiento económico a largo plazo y se expresa preocupación por el futuro económico del Reino Unido debido a la falta de inversión. Se sugiere que el Brexit ha generado incertidumbre sobre la dirección económica del Reino Unido, lo que ha afectado negativamente la inversión empresarial.

15:12

🛃 Desafíos del Brexit para el comercio y la movilidad

Se aborda el tema de la movilidad y el comercio post-Brexit, destacando los desafíos que enfrentan los ciudadanos británicos y las empresas para operar en Europa. Se menciona la creación del cargo de Ministro de Oportunidades del Brexit y se cuestiona la afirmación de que los beneficios del Brexit están siempre a punto de aparecer. Se discuten los efectos de la pérdida del acuerdo de libre comercio con la UE y se compara con los acuerdos comerciales nuevos y menos significativos que se han establecido. Se argumenta que los esfuerzos por localizar y descentralizar operaciones fuera del Reino Unido han traído consecuencias económicas negativas para el país.

20:13

🏙️ El impacto del Brexit en la ciudad de Londres y las generaciones futuras

Se reflexiona sobre el impacto del Brexit en la ciudad de Londres, considerada el centro financiero de Europa, y cómo la incertidumbre ha llevado a una lenta pero constante migración de negocios y personal hacia otros lugares. Se discute la perspectiva de las generaciones futuras, especialmente los jóvenes, quienes han perdido facilidades para viajar, trabajar e invertir en Europa. Se sugiere que el Brexit ha creado una división en la sociedad y ha evitado un debate sincero sobre cómo podría funcionar de manera más efectiva. Se cuestiona la promesa de un 'dividend' económico post-Brexit y se argumenta que los beneficios económicos prometidos no se han materializado.

25:13

🏛️ Reflexiones finales sobre el Brexit y la soberanía

Se presentan conclusiones finales sobre el Brexit, argumentando que ha sido un acto de autopreservación económica y que ha afectado negativamente a la nación y a los más vulnerables. Se critica la falta de honestidad sobre los compromisos y los costos del Brexit y se sugiere que la discusión sobre la soberanía y el regreso del control debería haber sido posible, pero con la aceptación de las consecuencias económicas. Se señala que con la soberanía viene la responsabilidad y la capacidad de tomar decisiones, pero también la obligación de aceptar las consecuencias de dichas decisiones.

Keywords

💡Brexit

Brexit es el acrónimo de 'British exit', que se refiere al voto del Reino Unido para abandonar la Unión Europea en 2016. En el guion, se discute cómo las políticas económicas y las consecuencias económicas están intrínsecamente ligadas a la decisión de Brexit, y cómo esto ha afectado a la soberanía, los costos de la burocracia y las relaciones comerciales del Reino Unido con la UE.

💡Soberanía

La soberanía es el control total de un país sobre sus propias leyes y políticas. En el guion, se menciona que la idea de soberanía sobre el sentido común económico ha llevado a decisiones que han tenido un impacto negativo en el comercio y la economía del Reino Unido después de Brexit.

💡Mercado único europeo

El mercado único europeo es una zona que permite la libre circulación de bienes, servicios, personas y capital dentro de la UE. El guion destaca cómo el Reino Unido ya no forma parte de este mercado, lo que ha resultado en un mayor costo y burocracia para las empresas y una disminución de la facilidad de comercio.

💡Costo de la burocracia

El costo de la burocracia se refiere a los gastos y el tiempo que las empresas deben invertir para cumplir con las regulaciones y procedimientos oficiales. En el guion, se argumenta que el Brexit ha incrementado esta carga, afectando negativamente a las pequeñas empresas y complicando sus operaciones comerciales.

💡Efecto económico

El efecto económico hace referencia a los cambios en la economía de un país como resultado de ciertas decisiones o eventos. En el guion, se discute cómo los efectos económicos del Brexit, como el aumento de los precios de las importaciones y la disminución de la inversión, han tenido un impacto negativo en el Reino Unido.

💡Autonomía reguladora

La autonomía regulatoria es la capacidad de un país para establecer sus propias reglas y regulaciones. Aunque se presentó como una ventaja de Brexit, el guion sugiere que esto ha resultado en costos adicionales y la creación de una burocracia duplicada, lo que no ha beneficiado económicamente al Reino Unido.

💡Inversión extranjera directa

La inversión extranjera directa (IED) se refiere a la inversión en activos productivos por parte de empresas o individuos de otro país. El guion menciona que la incertidumbre creada por Brexit ha disuadido la IED, lo que ha afectado el crecimiento económico y la creación de empleo.

💡Control de las fronteras

El control de las fronteras implica la regulación de la entrada y salida de personas y bienes a través de los límites nacionales. El guion destaca cómo el control de las fronteras después de Brexit ha creado obstáculos comerciales y ha complicado las operaciones de las empresas que antes podían moverse libremente dentro de la UE.

💡Mercado laboral

El mercado laboral se refiere a la interacción entre los trabajadores y las empresas en la economía. El guion discute cómo el Brexit ha afectado el mercado laboral, especialmente en sectores que dependían de la mano de obra migrante, y cómo esto ha llevado a una disrupción en la provisión de servicios y productos.

💡Derechos de movimiento

Los derechos de movimiento son las libertades para viajar, trabajar y residir en diferentes países. El guion menciona que el fin de la libre circulación de personas como parte de Brexit ha limitado las oportunidades para los jóvenes y ha creado barreras para la movilidad y el comercio.

Highlights

The 'mini' Budget marks the peak of economic policies initiated post-Brexit, prioritizing sovereignty over economic rationale.

Post-Brexit, the UK faced significant trade barriers with the EU, leading to a near standstill in shipments.

Brexiteers have failed to present a compelling argument on how Brexit will yield economic benefits.

There exists a political silence surrounding the impact of Brexit, affecting both major parties.

Brexit is described as an act of economic self-harm, with negative effects on prices, investment, and trade.

The UK's departure from the EU has resulted in the hardest and least aligned form of Brexit, excluding the single market and customs union.

The immediate aftermath of the Brexit vote led to a devaluation of the pound, increasing import prices and inflation.

Brexit has increased bureaucracy and costs for businesses, contrary to pre-Brexit promises of streamlined operations.

The 'mini' Budget's economic policies have been met with skepticism, causing market instability.

Brexit's effects on the UK's trade recovery have been negative, with a flat recovery compared to other G7 countries.

The number of trade relationships between UK small businesses and their EU counterparts has significantly decreased.

The Resolution Foundation estimates a long-term wage reduction of £470 per person due to Brexit.

Brexit has led to a reallocation of business operations from the UK to the EU, impacting the domestic economy.

The UK's economic growth forecast for 2023 is near the bottom, with only Russia faring worse among major economies.

The Office for Budget Responsibility predicts a 4% long-term negative impact on the UK economy due to Brexit.

Brexit's proponents envisioned a nimbler, deregulated UK economy, but the reality has been increased costs and bureaucracy.

The end of free movement has disrupted specific industries and reshaped the UK economy, with mixed outcomes.

Northern Ireland's unique position post-Brexit has become a point of contention and a boon for its economy.

The political silence on Brexit's effects is widespread, with neither major party addressing the economic repercussions.

Brexit's impact extends beyond economics to sovereignty and national identity, with significant political and social trade-offs.

The 'mini' Budget and Brexit policies are seen by some as potentially leading to an economic 'blowout' rather than a gradual decline.

Transcripts

The "mini" Budget was really the culmination

of the economic policies that have been put

in place since the Brexit vote.

A very particular idea of sovereignty

over economic good sense.

We couldn't ship anything to the EU, nothing.

It's bordering on disastrous.

The Brexiteers haven't really formulated a cogent case

as to why Brexit is going to deliver a dividend.

There is a political conspiracy of silence

around the effects of Brexit.

It spans the government, it spans the Labour Party.

Make Brexit work.

The UK's decision to leave the European Union

is an act of economic self-harm.

In terms of prices, investment, and in terms of trade,

we're seeing negative effects, not a pandemic effect, not

an energy crisis effect.

These are very clearly Brexit effects.

When the UK voted to leave the European Union in 2016,

it seemed like a simple decision between leaving and staying.

What we've ended up with, through many years

of back and forth, has been pretty much

the hardest, least aligned version of Brexit

that you could get.

We're not part of the European single market.

We're not part of the customs union.

We just have a very bare bones free trade agreement.

And the costs of that have become clear over time.

Of course, those have been masked

by the Covid-19 pandemic, which shut down economies

all over the world.

And then the crisis in Ukraine, which

has scrambled global energy markets,

helped to drive inflation.

But we're just now starting to see

the Brexit effect coming through and it's not

particularly pretty.

Let June the 23rd go down in our history as our Independence

Day.

We've got our country back.

We see it, first of all, in terms of the original vote

to leave the EU.

That sent the pound down about 10 per cent

against our trading partners, and that

makes imports more expensive.

It also makes your exports more competitive.

But in this case, our exports didn't budge.

They didn't go up at all, but our import prices went up,

and that raised inflation by about 2 per cent to 3 per cent.

So that simply made people poorer.

When it's been calculated that the immediate cost of that

was about 870 pounds per household.

I'm Dani Loughran.

I'm the Managing Director of Aston Chemicals, a speciality

chemical distributor for the personal care industry.

Well, our freight costs went up.

Everything that's costed in dollars around the world

became more expensive if you're paying in sterling,

and that was caused by Brexit.

For many years, the Brexit side of the debate

felt they won the argument because there hadn't been

much absolute panic in markets.

In the recent "mini" Budget, Kwasi Kwarteng

really spooked the markets.

Sterling absolutely plummeted, then

subsequently recovered a bit.

But more serious was what's happened

to government borrowing costs, because the financial markets

have taken the view that the Budget was effectively

reckless.

You remember the statement we've had enough of experts.

The "mini" Budget was really the culmination

of the economic policies that have been put

in place since the Brexit vote.

Brexit's proponents refused to even discuss

the idea that Brexit's a factor in the UK's performance.

Brexit opponents, or Remainers, want

to pin everything on Brexit.

The truth is inevitably somewhere in between.

But to say that Brexit isn't a factor in what you're seeing

in the UK performance is silly.

Of course, it is.

We're starting to see a very interesting pattern emerging,

comparing Britain with the performance

of other advanced economies.

After the pandemic, there was a trade recovery

by all the other G7 countries and Britain's trade recovery

has been more or less flat.

So the UK fell behind in its trade intensity.

One of the other things you can measure

is the drop off in the number of trade relationships

between smaller companies in the UK

and their foreign counterparts.

And that's important because it tells you

something about trade patterns, but also

tells you something about the way

that smaller companies in the UK used

to grow by gradually expanding their business,

selling stuff into the European single market,

and that's simply not happening anymore.

The LSE has calculated that the number of relationships

between the UK and the EU fell by about a third

in the first six months after the Trade and Cooperation

Agreement came into force.

The Resolution Foundation has calculated

that the long run hit to wages will be 470 pounds per person.

Brexit has increased bureaucracy.

Many small businesses have really

struggled to get to grips with that.

I'm Kiran Tawadey.

Hampstead is an organic tea company.

We import tea from all over the world

and sell it all over the world.

We were told that we would have the most amazing deal.

We're going to get our sovereignty

and we were going to keep all the advantages

of being in the EU.

As a business, we were dumb enough to believe that.

Come January last year, we got an order from Italy,

we shipped it, as normal, thinking

there'll be a little bit of paperwork

and we'll figure it out.

And it sat for 12 weeks in different customs' houses.

So the reality was very different.

I'm Rob.

I'm Vicky.

And we co-founded Little Star Jewellery in 2017

as a husband and wife team.

The plan was always to establish the brand in the UK first,

and then Ireland, onwards to France, onwards to Germany.

The whole question of Brexit didn't really

come into my thought much because at no point

did I think it would be as complicated for businesses

to grow and to develop.

Remember, when we were part of the single market,

you could throw a box of tea or a packet of bangers

into the back of a van in Birmingham

and just drive it to Barcelona, or Bonn, or Brussels

without let or hindrance.

Now you can't do that.

The reality was January to June, we couldn't ship anything

to the EU, nothing.

It's 27 countries, they all have different borders,

they all have different rules.

And we were treated as a third country.

And we just had to suck it up.

Come May, I decided I needed to do something.

I said, what if I set up my own entity in Europe

and made that the master distributor for our company

and for our products.

And rather than sending small consignments

at a time, which were very costly, and complicated,

and time-hungry, and resource-hungry why not

just do one big consignment every so often.

Clear customs, all those formalities, VAT once,

and then distribute out of the warehouse

to all of your clients in the European Union.

That means less business taking place in the UK

and more business taking place in the European Union.

It became just unviable for us to continue

to export from the UK and use the UK

as our European distribution hub.

Lorries would sit there for days on end.

So we moved our entire European business to Poland.

That immediately halved the amount

of product coming through this warehouse.

We are now using fewer freight partners

in the UK, more in Germany and Poland,

paying our customs duties to EU countries.

We're employing fewer people in the UK and more in Poland.

It's a reduction in money that we

are paying to the UK economy.

We were lucky that we were able to do that.

We've got some agents in France.

We're doing really well in the Netherlands and in Spain.

All of that has just disappeared.

We lost so much business overnight with Holland,

but it doesn't mean that we have enough business already

established that we'd go and set up an office in Amsterdam.

It's not viable for a business of our size of two people.

Getting the product to customers in the European

Union would have been 2 days, has now become 21 days.

The only angle for us around that

is to do deals with distributors,

but those people work on between 30 per cent

and 35 per cent margins.

We're left with virtually nothing

or we let the business go.

We got a Dutch sales agent who opened over 30 doors

in the space of two months, was over 30 customers have become 2

because only 2 of them can actually

be bothered with the implications of what they've

got to do to get stock from us.

It's just too much of a headache.

That is the long-term danger for the British economy.

That smaller companies that used to expand

by starting to move into European markets,

which was very easy to do before 2016,

will simply just not do that.

We were just upsetting all our customers.

One of them actually said to us, we

don't want to deal with the UK anymore

when we can find equal products from within the EU.

So I'm really sorry.

It was a tough conversation.

We went to a trade show.

No European customers came to the UK pavilion.

And we overheard one of them saying,

there's no point going there.

With Brexit, we don't even know what's going to happen.

So there's no point trying to build new alliances

with British suppliers.

The damage from non-tariff barriers

is it puts the UK behind a wall.

The European Union, 27 countries,

that have one set of rules for the movement of goods, people,

capital, and labour.

It's broadly more cost, more aggro, more uncertainty,

more delays, less efficiency.

In some cases, a sort of unequal playing

field with competitors overseas.

A French company will buy from Germany

because they'll probably be able to get the same product easier

and without any of the extra costs

that we're having to apply to get it out of the UK.

We design all of the range here, and then we

send it out to manufacturers in Thailand and Hong Kong.

We have a tariff for it coming into the UK,

then have to pay another tariff when

we're sending out of the UK, because it's not

produced in the UK.

The EU is very bureaucratic.

Before that we were within the bureaucracy and now

we're outside of it.

The whole story about EU red tape

making things more difficult for businesses from our perspective

is a complete lie.

Since 2016, business investment has

been growing in all other G7 countries, but not in the UK.

You can see that for a very long time business

investment was an upward curve in the UK,

but since 2016 in particular and the Brexit vote,

it's been plateauing.

And the government's been trying to rectify this.

It's been throwing lots of money at it.

They've introduced something called the superdeduction,

where you get huge allowances if you invest

in capital and innovation, but it hasn't really

shifted the dial.

And really worrying for the future of our economy

because in the end, investment drives

the capital and the ability for economies

to grow into the future.

And some people are saying, I mean,

Brexit's not the only thing by any stretch of the imagination,

but something is going on.

There might be a small effect that the UK is a more service

sector driven economy than others.

But France is just as much of a service sector

economy as the UK.

Germany, big manufacturing economy,

isn't that much more of a manufacturing

economy than the UK.

And in every other country, we've

seen much more business investment.

This is the Brexit effect.

People don't know the direction of the UK economy.

Inevitably business investment doesn't grow as strongly.

We've seen in all areas, in prices, in terms of investment,

and in terms of trade, we're seeing negative effects

due to Brexit, which we can now pinpoint as a Brexit effect,

not a pandemic effect, not an energy crisis effect.

These are very clearly Brexit effects.

Plainly there's been a huge impact on the British economy

caused by the Covid pandemic.

Equally the supply chain effects of the Ukraine war,

particularly on the energy price.

It would be ludicrous to claim that problems facing

the British economy are exclusively down to Brexit,

but what you can do is to draw a comparison between Britain

and other countries.

We see the UK pretty close to the bottom of the league table

in terms of the forecast for economic growth,

particularly in 2023.

So the UK essentially sees no growth at all.

And the only country that was worse than the UK

was sanctioned Russia.

You can explore the gap between the UK's performance, which

has uniquely suffered Brexit, and the performance

of other economies that have not.

The UK government would argue that's something

to do with the bungee jump effect of the pandemic

where Britain went down, then came back up more quickly,

and now things are settling down again.

I think it's really easy for the government

to try and push the Brexit effect under the carpet

and blame everything onto Covid, and now everything

onto Ukraine.

I can see it in the figures and in the way

that our business is operating that we were really

hit badly by Brexit last year.

We've put measures in place that are

detrimental to the British economy unfortunately,

but will help us.

The Office for Budget Responsibility

thinks that ultimately Brexit will

cause the UK to be 4 per cent worse off.

It's about 100bn pounds a year that the economy is not

producing 40bn pounds of tax revenues or so.

We are poorer because we're not getting that economic growth

that we otherwise would have done.

The Brexiteer notion of a Brexit dividend

is often based around the idea that the UK

can have a nimbler economy.

It can deregulate.

The difficulty is, when you deregulate, you create

a separate regulatory system.

The chemical industry spent 500mn pounds

over a decade registering their chemicals in the European

Union, which gave them access to the British market and 27

other countries.

They're now having to re-register

all of those chemicals for a separate UK register

at a cost now estimated by the government at 2bn pounds.

So what we've essentially done is ask industry

to spend billions of pounds duplicating a regime that

already existed in the EU.

And because we want to be sovereign,

we want to be different, we're building our own.

But that is just cost.

I don't understand anyone who says that deregulation is going

to be a benefit to industry.

From my industry's point of view,

it is nothing but extra costs, bureaucracy, and work

for no advantage whatsoever.

It's a British business.

After we've left, the EU has faced a recruitment crisis.

Areas like construction, hospitality, social care,

agriculture.

Again, you can argue till you're blue in the face about how

much of that is Brexit, how many people left because of Brexit,

or how much of that was because of Covid.

Some people would argue that's for the better,

that we've cut off that supply of cheap European Union labour

that was able to come across to work in the UK under free

movement.

The idea eventually is that companies will invest more

in machinery and other ways to enhance productivity

to compensate.

But it's certainly caused some disruption in the short-term.

And the idea that the government was putting forward last year

that this was all part of the plan

to develop a high-skilled, high-wage economy

was problematic at the time and is problematic today.

So the end of free movement means

that the economy is reshaped.

For some industries, like hospitality and construction,

or soft fruit growing, that creates a painful period

of adjustment because those industries

were predicated on the idea that there would be free movement.

But ultimately that's a political choice.

We don't have to have a soft fruit industry.

We had one as a result of free movement.

We now have to decide if we want one going forward.

The long running row over Northern Ireland,

creating a border in the Irish Sea

to avoid the north-south border returning

on the island of Ireland has poisoned EU-UK relations.

The EU is using us as a negotiating chip

and saying that Britain can't join the Horizon Science

Research Project, which is worth 95bn euros,

hugely important to British scientists

and British universities.

But it's blocked because the British government

is trying unilaterally to rip up its obligations in Northern

Ireland.

While we have that attitude still in place,

I think it's very difficult to see our trading

relationships improve.

The discussion about Northern Ireland and its future trading

relationship was one of the things that bedevilled

the negotiations about Brexit.

Everybody knew it was going to be a problem,

but we did the deal anyway.

We voted for Brexit.

We signed a so-called Northern Ireland Protocol,

which Boris Johnson and Lord David Frost,

the former Brexit minister who negotiated the Northern Ireland

Protocol, spent the last several years trashing.

I seem to think it's become of some surprise

that the European Court of Justice

applies EU rules to Northern Ireland when they have agreed

that Northern Ireland should remain as part of the EU

single market for goods.

The one thing I say about the Northern Protocol

is that it's given Northern Ireland's an incredible trading

position in Europe.

It's the only place in the whole of Europe,

which has one foot in the UK single market

and another foot in the European Union single market.

It's an unwelcome fact for Brexiteers

that Northern Ireland has become an economic success story

and booming, certainly in terms of inward investment.

One of the reasons it's doing well

is because it has a place in the European single market

for goods.

It's exactly the same trading position with the European

Union that the whole of the UK had

until a couple of years ago.

There is a political conspiracy of silence around Brexit

and the effects of Brexit.

It spans the government, it spans the Labour Party

in particular.

It's very hard to separate out the effects of Covid

and the effects of Brexit.

The governor of the Bank of England

doesn't want to talk about it.

It's become a kind of taboo around this whole subject.

We absolutely need an honest debate

about the economic effects of Brexit.

Once you had a government, of whichever party willing to look

at the facts, then they could start

saying it looks as if Brexit has hurt us.

It's making you poorer.

This is what our evidence suggests.

The evidence will say that, by the way.

And then once you say that to the public

and keep repeating it, you can start opening the debate.

Politically, the truth is neither party

can be honest about Brexit.

The Tory Party doesn't want to be honest

that the actual choice that Brexit presents

is between being a rule-taker, between subjugation,

like Norway, and self-harm, which

is all the economic damage that comes from walling yourself off

from your nearest and biggest market.

And the Labour Party doesn't want to talk about Brexit

because it reminds voters why they voted Tory.

The Labour Party, as the Tory's frame it,

tried to block Brexit.

This is still a live rail in British politics.

People don't want to go anywhere near Brexit.

It's divided the country.

It's divided communities.

It's divided families.

But in a way, that shields us from a debate,

which we should be having, about how we can make Brexit

functioning in a way which doesn't distort the economy.

People who speak out against Brexit

are often decried as Re-moaners or Re-maniacs.

We're all being asked to accept something

which in 2015 was only the official policy of the UK

Independence Party.

Conservative Party, the Labour Party, the Liberal Democrats,

Greens, trade unions, the CBI, the whole of British political

and civic society believe Britain was better off inside

the European Union.

And yet we are all being told we have to pay allegiance.

This is a new national policy.

I expected there to be a one year down the road recap

what went wrong, and what was right, and how we can fix it,

but we haven't seen that.

It would be really good to hear what other people's

experiences have been.

There might be some good news stories, I don't know.

I haven't heard any.

I find it hard to think of anyone who said,

this has been brilliant for my business.

Some businesses will win as a result of Brexit.

Businesses that can produce products

for the UK market that are now too complicated or too

difficult to import from the EU.

That doesn't necessarily mean that the UK economy is winning.

EU-based companies have gained some of our contracts.

The EU freight companies that are gaining our freight

business, that isn't in the UK anymore,

they're all doing quite well.

The people in Poland that we've had

to employ in warehouses rather than people in the UK,

they're doing quite well.

In theory, the city of London is a place

where the UK being able to make its own rules

should be important.

This is our sector that we're the best at,

that we know the most about.

We were responsible for a lot of rule

making while we were within the EU.

To date, we haven't seen the results of that.

The predictions of doom for the city of London

were always overdone.

Big institutions, in particular, spent time actually

quite early on in the process Brexit proofing

their operations so that they could operate legally

whatever the outcome was.

What we've seen since then I think

is a slow drip where business and people get relocated

to other places where it makes more sense for them to be.

The city was the natural place to do financial business

in Europe and Brexit introduced a question mark into that.

We weren't given enough information.

We weren't told what Brexit would actually look like.

The losers will be some of the younger people

who voted against Brexit.

If you look at the age profile of people who voted for leave,

there's a vote amongst the older members of the population.

The younger generation will start to discuss this topic.

They can't travel easily anymore.

They need a nomad visa if they want to work in Europe.

They can no longer invest in Europe easily.

And with the geopolitical situation on a knife-edge,

it would be nice to be a part of a bigger group.

And I feel sorry that we aren't for the next generation.

Don't watch people who are not rich Remainers.

Will Britain leave the EU on time?

Sure.

You certainly hear conservatives who

say that if you can't demonstrate

the benefits of Brexit by the next election,

you're going to be in serious trouble.

And so you have the creation of jobs like Brexit Opportunities

Minister.

Leaving the European Union is the most fantastic opportunity

for the United Kingdom.

The benefits of Brexit are always just around the corner.

If this happened six years ago, by now,

somebody in government, given the fact

this is a Brexiteer government, should have identified

what the benefits are.

The Brexiteers haven't really formulated a cogent case

as to why walling the UK off from its largest

market on its doorstep will lead to a better economy.

When the government unleashed its Brexit opportunities

document, what was the number one item?

That you were going to have a crown

stamp back on your pint pot in the English pub.

The Vote Leave side presented a very optimistic view

of what the British economy would look like after Brexit,

including a massive series of deregulation, Britain

buccaneering around the world, striking trade deals

around the world.

There have been some trade deals,

but they've mainly been with countries that Britain already

had a trade deal with through the European Union.

Australia really is the only one exception to that.

Signing a free trade agreement with New Zealand or Australia

has ups and downs of the UK economy,

and is probably very, very marginally positive.

But it's nothing like losing a free trade agreement

and losing the frictionless trade you had with your biggest

trading partner that's only 20 miles away across the channel.

We lose 4 per cent of our GDP by Brexit.

We gain 0.08 per cent by the government's own estimate

through this trade deal with Australia.

All the attempts to lay out exactly what a Brexit

dividend looks like have thus far been totally unconvincing

and that's on the trade agreement front,

on the regulatory front, or the deregulatory front.

The best case scenario is that a Brexit dividend

is lots and lots of little changes

that in aggregate add up to something meaningful.

There's no sort of great idea that

is out there at the moment.

When the Brexiters said, oh, Brexit

will unleash Britain's global potential,

that made me very annoyed because we

weren't sitting on our laurels just easily

selling into France.

Everyone was already doing that.

We were already trading with the whole of the rest of the world.

Making things more difficult for us to sell into the EU

did not make anything easier.

Boo.

Brexit.

We have heard Project Fear again and again, on and on it goes,

but that all the aspects of Project Fear

so far have been wrong.

We were promised a punishment budget, that never happened.

We were promised an increase of unemployment by 800,000

by voting to leave, that did not happen.

Remainers did themselves no service

by claiming that immediately after a Brexit vote

that Britain's economy would crash into recession

and millions of people would be unemployed.

I mean, that hasn't happened, and probably

was never going to happen.

The Project Fear tag was very effective

from the Leave campaign and lasts to this day.

I think the trouble is that Brexit is boring, and detailed,

and wonky, it was hard to talk about that wonky detail

around trading arrangements, and customs unions,

and paperwork in a political campaign.

Get Brexit Done, it was one of the most effective election

slogans you've seen.

We didn't even start to dig into those questions

until after the vote was finished.

The type of Brexit we decided to pursue

was economically the most harmful.

There was always a spectrum of economic impact versus ability

to make our own choices around things like regulation.

The European Union is not a superpower in the way

that the United States is a superpower,

but it is a regulatory and trading superpower.

Collectively, it's the world's largest market

and it harmonised all of its rules to allow everybody

to trade more freely.

And it forced other countries and trading

blocs to follow EU rules in many ways.

We can no longer blame European rule makers

for decisions and policies that we don't like or outcomes

that we don't like in our own economy.

With sovereignty comes a degree of ownership.

I think we can conclude, one, that Brexit was

an act of economic self-harm.

Two, that the losers will be the nation as a whole,

but also some of the poorest people,

because ultimately, we are poorer as a nation.

That hurts more vulnerable people more.

Third, I think something from economics we can say

is that we can't run referendums on very

simple economic slogans, and it's

dangerous to try and weaponise economics.

Brexit is a slow puncture.

It's not a car crash.

So that doesn't mean that Brexit creates an unemployment

crisis in the UK, but it may mean

that over time, UK workers find themselves

in less productive jobs and that makes

the economy smaller than it otherwise would have been.

It makes wages lower than they otherwise would have been.

The slow puncture analogy has been right from 2016,

but I think the "mini" Budget is that first sign

that if we push things too far, not only are you going

to begin to hear much more of an audible hiss,

but you might even have a blowout.

It's bordering on disastrous.

I don't think there's any real public awareness of this.

Even if we go and visit my mum for a weekend

and talk to her about the difficulties we face,

she'll go, oh, really?

I thought we had a deal.

Nothing's ever in the news about it.

Nobody else seems to be voicing any concerns, apart from maybe

you on Twitter.

Brexit wasn't all about the economy.

It was about stopping the free movement of people.

It was about repatriating a sense of agency

into the UK economy.

The trouble was the Brexiteers and those

who sold it were not honest about the trade-offs

and the costs of that, which actually, economically,

outweighed the benefits.

It is legitimate to have a discussion

about national sovereignty and taking back control.

You could have had that argument,

but you have to accept that there

will be some economic impact.

The trouble was Boris Johnson famously

adopted a cakist approach, to have your cake and eat it.

Cakism, or cherry-picking, as Michel Barnier used to call it,

this idea that you could retain all the access you wanted

to the EU single market and still be

free to go off on what you might call your buccaneering Brexit.

It was that Cakism that was slowly but surely exploded

by the process of negotiating with the EU.

And we're still paying the price of that, really,

because people have never been prepared to accept or identify

the trade-offs and then start talking

about what you can do about it.