LONDON – From England’s south coast, Simon Boyd’s company manufactures prefabricated steel buildings and exports them to clients in places as far-flung as Ghana and Barbados. Mike Hawes, meanwhile, speaks for the U.K. auto industry as chief executive of the Society of Motor Manufacturers and Traders.
When the United Kingdom voted in 2016 to leave the European Union, the two business figures stood on opposite sides of the argument. Nearly a decade on, however, both say Brexit has left them deeply dissatisfied.
Supporters of leaving the EU once sold Brexit as the start of a more prosperous era, one in which Britain would shake off rules set in Brussels, take back authority over its laws and borders, and unleash stronger economic growth. Instead, the transition has proved far more difficult, with the country grappling with the loss of frictionless access to the EU’s 27-member single market and its roughly 450 million consumers.
The wider picture remains bleak: growth is weak, taxes are elevated, public services are under intense strain, and one government after another has failed to stop migrants arriving on England’s Channel coast in small inflatable boats. Against that backdrop, the anniversary is hardly a moment of celebration.
“No, it’s not delivered everything that was said it would deliver on the tin, but it is delivering,” Boyd told The Associated Press. “It’s very sluggish. You only need to look at the statistics to see that.”
Boyd, managing director of REIDSteel, which has around 130 employees at its Christchurch, England, facility, says he does not regret backing Brexit. But he argues the outcome has been undermined by politicians who lacked the will to fully implement it. He also points to unforeseen shocks over the past decade, including the COVID-19 pandemic and wars in Ukraine and the Middle East.
Economists point to deeper problems
For businesses, the costs began rising soon after the referendum as companies braced for years of uncertainty while London and Brussels negotiated the terms of their new relationship. When the U.K. formally left the EU on Jan. 31, 2020, fresh rules on trade in goods and services added paperwork, delays and expense to transactions with European partners.
Creon Butler, who leads the global economy and finance program at Chatham House, a London-based think tank, said there were long-term consequences to leaving the European single market.
“Whatever was promised, whatever one hoped for, (you have) to accept that it has been a major loss of wealth and prosperity for us through the choice we made to leave,” he said.
“That’s a decision the British public have made, and they’re entitled to make it, but it does make us poorer,” he added.
By most measures, the British economy today is weaker than it would have been without Brexit, according to a recent report published by the National Bureau of Economic Research in Cambridge, Massachusetts. The report, compiled by researchers in Britain, Germany and the U.S., compares the performance of the U.K. economy to 33 other countries, including its European neighbors, the U.S., Canada and Japan.
Brexit has reduced Britain’s gross domestic product, a broad measure of economic output, by 6% to 8%, investment by 12% to 13% and productivity by 3% to 4%, the researchers concluded.
Carmakers had many challenges
Britain’s carmakers were early and outspoken opponents of Brexit, arguing that increased red tape surrounding shipments of parts and finished vehicles would damage an industry built on a network of interlinked factories in multiple European countries.
Those concerns reduced investment in the U.K. auto industry because international carmakers were less likely to see Britain as an attractive way into the European market. As a result, the industry is hoping that international trade deals will help boost demand for its products.
“We have been able to move with the times, so to speak, but undoubtedly it’s putting us at more cost into the industry, more pressure,” Hawes said.
Brexit supporters trumpeted the freedom to negotiate its own trade agreements as one of the primary benefits of leaving the EU, and Britain has since signed dozens of deals with countries ranging from Australia to India to the United States.
But EU countries still account for 41% of Britain’s exports and half its imports, according to the latest government figures.
During more than 50 years as a member of the EU and its predecessors, many British businesses also came to rely on Europe as a source of cheap labor, especially after the bloc’s eastward expansion in 2004.
That pipeline dried up after Brexit ended the free movement of labor, one of the bloc’s founding principals.
The owners of Britain’s curry restaurants, an integral part of communities from Aberdeen in Scotland to Aberystwyth in Wales, have been especially hard hit by the loss of Eastern European workers who went home rather than deal with burdensome new visa requirements. And they’re furious because the industry backed Brexit after assurances it would lead to more visas for South Asian cooks, something that hasn’t happened.
“We feel betrayed,″ said Oli Khan, president of the Bangladesh Caterers Association UK, who serves up tandoori lamb chops, vegetable biryani and chili paneer at his restaurant in Stevenage, north of London.
In an effort to mitigate some of the problems caused by Brexit, Prime Minister Keir Starmer has begun talks with the EU about rebuilding a closer relationship as he seeks to energize the country’s stagnant economy.
Polls suggest frustration with Brexit is growing
Starmer’s move comes as a survey by the Ipsos polling firm, the Policy Institute at King’s College London and the think tank UK in a Changing Europe suggests that frustration with Brexit is growing.
The survey of 2,245 Britons aged 18 and older carried out in May, found that 48% said Brexit was going worse than they expected, up from 28% in March 2021. Some 9% said it was going better than expected and about one in three said it was going as expected.
But Boyd said the most important survey is still the one that took place on June 23, 2016, when 51.9% of those who cast ballots — or 17.4 million people — voted to leave EU.
He continues to believe that Britain has a brighter future outside the EU.
Brexit hasn’t delivered on its promise because politicians, large corporations and other entrenched interests worked to thwart the will of the people, Boyd said. This resulted in a Brexit deal that kept Britain too closely tied to the EU and unable to realize its potential as an entrepreneurial nation filled with creative, hardworking people, he said.
And there’s no going back, he said.
“Imagine if we were to rejoin … today. The conditions upon which we would be allowed back in would be akin to us re-boarding the Titanic on the condition that we surrender our life vests first,″ he said. “Need I say any more?”
