We need to talk about the elephant in the room, Brexit.
On Wednesday, current Prime Minister Rishi Sunak announced his five priorities for the time he is in office. Halving inflation, Growing the economy, Decreasing national debt, Reducing NHS wait times, and tackling immigration. He went on to say “I think people do accept that many of these challenges are at least in part, the legacy of Covid and impacted by the war in Ukraine.” and he’s not wrong. People do accept that these do play a part in the frankly abysmal state of our country today. However, there’s an elephant in the room, and if we don’t address it, none of those problems are getting solved.
Brexit. No one seems to want to mention it. If we mention the cost of living the government have no problem placing the blame with the Kremlin and their invasion of Ukraine, but they won’t even whisper the B word. A struggling NHS near breaking point? That of course is simply the consequence of a 3 year long health pandemic, the B word isn’t crossing their lips. National debt? Couldn’t possibly be the time to mention the B word.
Well, I’m mentioning it. Because the social, industrial, and economic consequences of Brexit may not be politically palatable, but ignoring them doesn’t make them any less real. The consensus amongst economists now is that Brexit has significantly worsened the country’s economic performance, and that the plans in place to mitigate this - trading deals with countries like Australia - do not come close to mitigating the financial loss of leaving the trading Bloc. The Office for Budget Responsibilty - an official government body - have said they expect the UK economy is going to end up 4 per cent smaller than it would otherwise have been, had we stayed in the EU. That is a hit of around £100billion a year.
Every country is struggling, this is true, but when we look at the G7 nations and we see the UK underperforming compared to all the others, and is the only one of the 7 to have not seen it’s economy return to late 2019 levels, we have to question why. All of them were impacted by Covid, all of them are impacted by the Russia-Ukraine war. What is the one thing we have that they don’t? Brexit and it’s consequences. And it’s been happening since the referendum. The value of the Pound Sterling depreciated by 10% in 2016 after the referendum. This represents an immediate loss to the UK economy, and in the 6 years since, it has never returned to it’s pre-referendum value. In simple terms this means the country lost money, they had to make the money back, so inflation, import prices, and business rates all increased. However, wages didn’t. So even without covid and the Ukraine war to contend with, Brexit was already costing UK households 2.9% of their wages, or around £870 a year.
The OECD is predicting that over the next 2 years, the UK will perform worse economically than any other G7 nation bar Russia. Which would be on trend for what we’ve seen in the last two years. Back in January 2021, almost every major country saw an increase in trade, except for the UK. January 2021 is when Boris Johnson’s Trade and Cooperation Agreement came into play, making it much harder to import and export goods between the UK and the EU. In the aftermath of that, exporting of UK goods to the EU has decreased by 26%, and the variety of goods being exported has also fallen to 42,000 from 70,000.
It is clear that the impact of Brexit on the UK economy, and therefore also national debt and the cost of living, is significant. And ignoring that won’t solve the problems it is generating. And it’s not just money that has been lost, it is people too.
The NHS is on it’s knees. And yes, undeniably Covid is a large part of that. But it probably doesn’t help that net EU migration fell from 300,000 in 2016 to 0 in 2021, and that between 2016 and 2022 the number of new EU born nurses joining the NHS fell by 87%. As of September 2022, the most recently available data, the NHS has 133,400 vacancies. A record high in the 5 years they’ve been tracking the data. There is not exact up to date data on how many EU nationals left the NHS after the Brexit referendum, but as of 2019 it was 22,000. The deadline for EU nationals to apply for settled or pre-settled status was June 30th 2020, and if they didn’t have it by January 1st 2021, they were no longer able to live or work in the UK. New census data released in November 2022 suggests that as many as 1 million EU citizens who had applied for this scheme, were no longer living in the UK. Combining this with the people who simply left without applying, it would be fair to guess the number of EU NHS workers who have left the UK is significantly higher than 22,000 now.
But it’s not just the NHS. Multiple sectors are struggling without EU workers. In 2021, the number of EU citizens leaving the UK outnumbered those entering by 12,000, meaning net migration from the EU was -12,000. Hospitality, Retail, Cleaning and Maintenance are also struggling hugely. And this tight labour market is also contributing to the increase in inflation and the decrease in wages. It also now costs businesses visa fees to replace the workers who previously could work here visa free, and those visa’s aren’t cheap. The cost of employing one person from the EU now for a large business is up to £10,000, and around a four month wait.
Rishi Sunak’s told us his priorities, and he said they are the people’s priorities, and largely this is true. But he gave no information on how he was going to be tackling them, and whilst he was comfortable talking Covid and Ukraine, there was no mention of Brexit. He asks that we judge him on the effort made to make a difference in these five areas, but it seems clear that significant change cannot be made until those at the top acknowledge just how much of an impact Brexit did have on them. And, if the polling data is right, it seems those at the top are the only ones we’re waiting on to come to that realisation. Because since July 2022, over 50% of people have consistently said we were wrong to leave the EU, and since January 2022 no more than 39% of people have said we were right to do it. In fact in November 2022, we hit 56% of people who believed it was the wrong choice.
The people know, the experts know, the question is Mr Sunak, do you know it’s time to stop being scared of the B word?