The Economic Consequences of Brexit: Impact on the UK Economy

2024-01-31 20:19:42

– The exit from the EU has finished the kingdom

Alexander Mühlauer from London

Published: January 31, 2024, 9:19 p.m

Brexit incarnate: Boris Johnson, former Prime Minister of Great Britain (photo from December 2023).

Photo: EPA

Brexit was never about the well-being of the economy, even Boris Johnson was honest enough to admit that. He only had two words left for the concerns of companies: “fuck business”. This attitude is now taking revenge. After Johnson’s brilliant election victory in 2019, the Tories are threatened with disaster in this year’s general election. The poor economic situation is primarily to blame. And Brexit played a decisive role in this.

Four years ago, on January 31, 2020, the United Kingdom formally left the European Union. This was not only followed by the exit from the largest economic area in the world, the EU internal market; Johnson also rejected a customs union with Brussels. What remained was a relatively hard Brexit, at least cushioned by an agreement that regulates the movement of goods.

These rules mean that London is now introducing new import controls. From January 31st, animal and plant products coming into the UK from the EU will be checked. The British government had already postponed these controls five times, but now the time has come. For companies, this means once again: higher costs. Brexit costs.

Many companies in the EU have to consider whether it is still worthwhile to deliver bacon and liquid eggs to Great Britain so that there are enough ingredients for English breakfasts there. In any case, the bureaucratic effort is enormous. In order to fill out the necessary customs declarations, you not only need new IT systems, but also people who can operate them. No wonder that small and medium-sized companies in particular see no benefit in delivering anything to the UK at all.

Debacle at the border

In London, the government is now blathering about the “most advanced border in the world”, but the truth is: this border shows what Brexit has done. There are the truck drivers who often have to wait hours for their freight to be processed. There are the customs officers, who sometimes seem overwhelmed. And there are the supply chains that have been repeatedly disrupted since Brexit.

The consequences are well known: Not only do supermarket shelves remain empty from time to time, food prices have also risen sharply in Great Britain. Simply because companies are passing on the Brexit-related costs to consumers. Even the British government had to admit that border controls were driving up inflation.

From an economic perspective, it is absolutely imperative that Great Britain gets closer to the EU again. The Brexit dream of a trade deal with the USA has not come true under either Trump or Biden. A few days ago, London even suspended negotiations on a new pact with Canada because there was a dispute over beef and cheese. So far, the two countries are still trading under the conditions that came from the time when Great Britain was part of the EU – the agreement is called Ceta.

Since Brexit, the kingdom has been on its own. The government must realize that it is missing what it had in the EU: an economic power that is second to none.

Brexit and its consequences

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