Research

The Centre for European Reform’s John Springford developed an algorithm that compares data on UK performance with that of 22 other advanced economies; it is weighted to form a non-Brexiting (or doppelganger) UK for contrast. Updated results in December found that UK GDP is 5.5% lower than it would have been had Brexit not happened. Investment is 11% lower and goods trade 7% lower (services trade was mostly unaffected). That equates to roughly £40 billion ($50 billion) in lost tax revenue, which is making it harder for the government to cut taxes or meet other spending priorities. 

"It's been more than a slow burn. It's been a serious reduction in economic performance," said John Springford, deputy director at the Centre for European Reform think-tank."If you impose barriers to trade, investment and migration with your biggest trading partner (EU), then you're going have quite a big hit to trade volumes, and to investment and to GDP," he said, pointing to a string of dismal economic data.

The end of free movement led to a shortfall of 330,000 workers, contributing to a severe labour shortage, particularly in sectors such as retail and hospitality, according to a new study by the Centre for European Reform. That is fuelling inflationary pressures. Investment has flatlined since the 2016 referendum.

Others agreed that it reflects badly on Berlin. “Germany currently lacks a strategic culture and failing to see the bigger picture,” says Ian Bond director of foreign policy at the Centre for European Reform. “This episode delayed the moment that Ukraine gets weapons. It is bad for European cooperation, as it says you might have to think twice about working with Germany. And it is bad for Germany security as it will encourage Putin to think Berlin is the soft underbelly.”

Det er en udlægning, som den britiske sikkerhedsekspert Ian Bond er enig i. Han er tidligere topdiplomat og nu direktør ved tænketanken Centre for European Reform. »Når Erdogan kan vise, at han er hård mod de kurdiskforsvarende skandinaver med deres foragtelige liberale ideer om ytringsfrihed og alt det der, så appellerer det til hans nationalistiske vælgere«, siger han. »Og den her ekstremt tåbelige og provokerende afbrænding af en koran her i weekenden betyder, at Erdogan kan vise sine islamiske støtter, at han forsvarer islam ved at stoppe de gudløse skandinavers forsøg på at komme ind i Nato«, fortsætter sikkerhedseksperten.

Migration was quite a big deal, Brexit-wise, but six years on, and two after the end of free movement, what has been the impact? The level of net migration certainly hasn’t fallen, but a new report from Jonathan Portes and John Springford argues that if you focus on workers, the end of freedom of movement has left about 330,000 fewer in Britain (460,000 fewer Europeans, but 130,000 more from elsewhere). That’s a reduction of roughly 1% of the labour force, prompting many to say that a lack of migration drove recent economy-wide labour shortages.

“I think this [Qatargate] will make it less likely for von der Leyen to co-operate with the Parliament,” said Camino Mortera-Martinez, head of the Brussels office at the think-tank the Centre for European Reform. She said the Commission president is riding high after weathering a pandemic, and now the war in Ukraine.

For many years, freedom of movement gave the British economy a supply of cheap EU labor. But with the Brexit agreement having ended that, the labor market is now feeling the pinch, with around 330,000 fewer workers available.A study by the independent think tank Centre for European Reform highlighted the fluctuating numbers and changing face of the British labor market, which has been transformed and depleted.By June, there had been a rise of 130,000 non-EU workers compared to a situation where post-Brexit immigration controls were unaltered, but this was offset by 460,000 fewer EU workers.

John Springford’s latest work for the Centre for European Reform puts the figure at 5.5%. He uses a “doppelganger” economic model that compares the UK’s economic performance to a group of countries that have performed similarly in the past. The paths of the UK and its “twin” separate in 2016 and the gap between the two is now 5.5%. In short, if we had stayed in the EU we would be much better off than we are now.