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European Union

Labour's Groundhog Day: How Brexit is Redefining the UK's Economic Woes

Strategic Insights

— 2 min read

As Labour continues to trail behind the Conservatives in the polls, the party is facing a mounting crisis that it can't blame on Brexit. The Chancellor's personal rating has plummeted to -66, and the government's borrowing has soared, with inflation and erratic tax revenues further exacerbating the situation. Meanwhile, unemployment is rising, especially among the young, and new jobs are drying up. It seems that Labour's politicians are struggling to take ownership of their mistakes and are repeating them, much to the nation's dismay.

Key Takeaways:

  • The UK's public finances would be at least £107bn poorer today and face EU demands amounting to at least £50bn a year if it weren't for Brexit.
  • The Office of Budget Responsibility (OBR) report of March 2020 estimated that the UK's GDP would be 4% lower than if the UK had stayed in the EU, but subsequent economic circumstances have entirely changed the outlook.
  • The UK's net migration since March 2020 has grown significantly, contrary to the OBR's initial assumption.
  • The UK's productivity problem does not lie with the private sector, but rather from the ever-burgeoning public sector that consumes taxes and breeds waste.
  • The UK has received the full benefit of import tariffs amounting to £23.3bn since 2021, and has saved a gross £88bn in EU membership fees between 2021-24.
  • The UK's economic woes are not due to Brexit, but rather to bad decisions made by its own politicians, including the denial of fracking and the abandonment of oil and gas production.
  • The UK has often outperformed similarly sized developed countries like France and Germany, and Labour should be developing a US reset, adopting competitive working practices and simpler, lower taxes that encourage higher productivity.

Statistics:

  • £107bn: The amount by which the UK's public finances would be poorer today if it weren't for Brexit.
  • £50bn: The annual amount the UK would face in EU demands if it weren't for Brexit.
  • £23.3bn: The amount of import tariffs the UK has received since 2021.
  • £88bn: The gross amount the UK has saved in EU membership fees between 2021-24.
  • £373bn: The amount the UK expects to have spent on Covid.
  • 2020: The year in which the UK officially left the EU.
  • 13: The number of economic research papers used to estimate the impact of Brexit on the UK's economy in the OBR's report of March 2020.

Sources:

  • The Office of Budget Responsibility (OBR) report of March 2020.
  • '75 Brexit Benefits' reference book.
  • Official figures on the UK's net migration since March 2020.
  • The UK's GDP growth rate since 2020.

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