Brexit: where we are four years on

Today marks four years since the UK formally left the European Union. At the time Boris Johnson, who had just won an 80-seat majority promising to “get Brexit done”, hailed the date as the start of a new golden era for Britain.

Turning rhetoric into reality has proved much harder, however. Johnson is gone, as is his successor Liz Truss. Rishi Sunak has adopted a more pragmatic approach and sought to mend ties with Europe but several issues remain as “divisive as ever”, said The Times, “including the UK’s ability to control its own borders, British economic interests, the Northern Ireland protocol and freedom of movement in Europe”.

The impact of leaving the EU has “not perfectly matched initial perceptions”, agreed Sanjay Vallabh, managing director of Vallabh Associates, on Insider Media. While some pro-Brexit supporters looked forward to a “smoother transition to new trade relationships, the reality has been marked by complexities and disruptions”. At the same time, “some of the dire predictions of economic collapse did not materialise”.

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Economy

The economic impact of Brexit has been a “subject of much debate”, said Vallabh, but the Office for Budget Responsibility’s own forecasts suggest the post-Brexit trading relationship between the UK and EU, as set out in the Trade and Cooperation Agreement (TCA) that came into effect on 1 January 2021, “will reduce long-run productivity by 4% relative to remaining in the EU”.

Brexit contributed to Britain’s “particularly high inflation” by “introducing friction into the country’s most important trading relationship, and hitting the value of the pound, which has made imports more expensive”, said CNN. A study by the London School of Economics found that Brexit was responsible for about a third of UK food price inflation since 2019, adding nearly £7 billion to Britain’s grocery bill.

In August the government announced that it was delaying health and safety checks on food imports from the EU for the fifth time in three years. The latest “foot-dragging demonstrates that Britain is still struggling to come to terms with the painful consequences” of leaving the EU, which has “piled costs on UK businesses and weighed on trade, investment and, ultimately, economic growth”, said CNN.

Taken together, the missed growth in goods and services trade account for about a £23 billion quarterly hit to UK exports, said John Springford for the Centre for European Reform think tank, which is consistent with a GDP reduction of 4-5% compared to a Britain that had remained.

But because the EU is still by far the UK’s largest trading partner “we must keep on making piecemeal repairs to the EU-UK relationship, while accepting that Brexit is a fact of life”, said historian David Reynolds in The New Statesman. 

New trade deals

The UK has also struggled to secure much-vaunted free trade agreements with some of the world’s biggest and fastest growing economies – what Boris Johnson famously described as the “sunlit uplands” for Britain outside EU “bondage”.

A deal with India, which Johnson vowed to conclude by October 2022, is still pending, while negotiations with the US have been shelved until after the presidential vote in November 2024.

The UK has now signed “signed trade deals and agreements in principle with about 70 countries and one with the EU”, said the BBC, but “the majority of these are simply ‘rollovers'”. That means the terms are the same as they were before Brexit. “And some of them are with countries with which the UK does very little trade.”

Immigration

Immigration was a key factor for many who voted to leave the EU, but since coronavirus restrictions lifted Britain has seen net legal migration – the number of people who arrived, minus those who left – explode, reaching nearly 750,000 people in 2022, more than double the number in the year before the Brexit referendum.

“Immigration is replenishing Britain’s labour force and deepening the diversity of its cities – a deliberate, if largely unspoken, strategy that is perhaps Brexit’s most tangible early legacy,” said The New York Times. “But it has come as a shock to people who voted to leave to make the country’s borders less porous.”

The truth is actually “very different”, writes Jonathan Portes in The Guardian. In fact, he added, “the migration statistics reflect something that is rare indeed in the UK right now – a successful policy implemented efficiently and effectively and, even rarer, the crystallisation of a genuine ‘Brexit opportunity’.”

Northern Ireland

The Irish dimension was “another blind spot in the mindset of most English Leavers”, said Reynolds. While Johnson effectively put a trade border down the Irish Sea, Sunak’s Windsor Framework, concluded in February 2023, established notional “green” and “red” lanes to ensure a lighter touch for goods from Britain that would stay in Northern Ireland, compared with the tighter controls and checks on goods intended for the Republic.

“Irish backstop. Max fac. Settled status. Windsor Framework. Over the years, Brexit has spawned its own wide and weird lexicon,” said Joel Reland for the UK in a Changing Europe think tank. Looking ahead to 2024 “‘trivergence’ is the next new word which could be on the tips of Brexit-watchers’ tongues”, he added, referring to the scenario where Northern Ireland “diverges from the regulations of both the EU and UK – creating three separate sets of rules and leaving itself adrift of both”.

Regulatory divergence also left Northern Ireland politically deadlocked, with the DUP refusing to return to power-sharing at Stormont in protest at what it saw as the deliberate undermining of the union – a boycott that may finally come to an end very soon.

What next?

Polls conducted over the past four years have shown a slow but steady move towards supporting a closer alignment with the EU. A recent YouGov survey found around half of Britons (51%) now favour rejoining the EU, followed by 42% who said they would support joining the EU Single Market. By comparison just three in 10 (31%) would support maintaining Britain’s current relationship with its largest trading partner.

Keir Starmer has promised to seek a major renegotiation of Britain’s TCA trade deal with the EU in 2025 if the Labour Party wins the next general election. He has, though, ruled out both rejoining as a full member or even returning to the Single Market.

As the Financial Times journalist Peter Foster observed in his 2023 book “What Went Wrong with Brexit”, for whoever wins the next election “fixing Brexit” will not be primarily about the exit itself, but about “putting the UK’s house in order” – an imperative from which leaving the EU has “proved a colossal distraction at a crucial juncture”.