Brexit predictions
from 2016, revisited.
September 8, 2024*
*This is a remastered version of our report published February 22, 2024
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On June 23, 2016, Britain voted to leave the European Union in a national referendum. After prolonged and complicated negotiations, the country effectively left the bloc in January 2020.
The withdrawal created the ongoing Irish border dispute, with an effective customs border in the sea between Northern Ireland and the rest of the UK.
The British economy lost around 5.5% of GDP, over £120 billion, as a result of Brexit alone, current estimates suggest.
The UK was short of 1.8 million jobs by 2023 due to consequences of Brexit, according to a Cambridge Econometrics report, commissioned by the Mayor of London.
Gross value added of the manufacturing sector grew over the years but did not reach the promised increase of £45 billion.
In fishing, the results were disappointing, as many in the industry felt betrayed by the Leave campaigners.
Brexit drastically reduced the number of migrants arriving from the EU.
By 2023, Brexit cost the average British household £850 per year, according to the National Institute for Social and Economic Research.
Three years passed since the United Kingdom actually withdrew from the European Union, and eight years since the Brexit referendum had taken place.
We revisit this historic decision and see how it affected the British economy and society. Using the latest data and analysis from a broad range of sources, we assess which side gave more accurate predictions on the consequences of the withdrawal.
Vote Leave was the campaigning organisation supporting the decision to “Leave” the EU.
It was directed by political strategist Dominic Cummings and backed, among others, by then-Mayor of London Boris Johnson, who later served as Prime Minister from 2019 to 2022.
Britain Stronger in Europe advocacy group led the campaign to “Remain”.
It was backed by then-Prime Minister David Cameron, who initiated the Brexit referendum in an attempt to settle the United Kingdom’s position within the EU and resigned after the public voted to Leave.
Many organisations joined the effort and supported one of the sides. Campaigners have used various influence tactics from appeals to emotions to data-based arguments.
Part of the strategy of both camps was to instil fear in the voters about the consequences of the opposite choice.
In particular, the Remain campaign is often accused of exaggerating the risks of Brexit disturbing the status quo, dubbed "Project Fear". This criticism was also directed at opponents of Scottish independence, especially in the run-up to the 2014 referendum.
Some arguments speculated about the future.
“Remainers” suggested that leaving the EU would quickly cause a recession, millions of jobs lost and a steep rise in food prices. “Leavers” argued that staying in the EU would lead to an influx of immigrants and loss of sovereignty.
Other arguments were based on assessing the past.
The Remain camp highlighted the benefits of the EU, such as free movement of people, goods and services, access to the single market, protection of human rights and environmental standards, scientific cooperation and participation in various EU programs and agencies.
The Leave camp emphasised the drawbacks of the EU membership, such as loss of control over the laws, borders and budgets, regulations imposed by the EU, and alleged lack of democracy and accountability in the EU institutions.
Some claims were based on dubious sources, cherry-picked data, or were just speculative scenarios.
This arguably promoted confusion, uncertainty and anxiety among the voters, who faced a complex and largely irreversible decision with limited and conflicting information.
The London School of Economics and Political Science collected a library of campaign materials, mostly leaflets, which have been used by both camps in the build-up to the referendum, some of them illustrate this report.
We compiled predictions made by both camps in their official materials, including archived versions of the websites and the aforementioned leaflets.
It is hard to isolate the impact of Brexit from other factors when it comes to assessing predictions.
Since the Brexit referendum on June 23, 2016, major global events such as the COVID pandemic and the war in Ukraine had shifted global markets, distorting the effect of Brexit itself.
Moreover, the unexpectedly long and complicated withdrawal process was not anticipated by any side, making it harder to judge their predictions.
The United Kingdom left the EU on January 31, 2020, but remained in the transition period until the end of 2020, during which it followed the EU rules and regulations.
The UK and the EU reached a trade and cooperation agreement on December 24, 2020, which established the new terms of their relationship since 2021.
A major issue the withdrawal created was the Irish border dispute.
The Good Friday Agreement of 1998 ended 30 years of violence in Northern Ireland, and guaranteed that there will be no border between the independent Ireland and Northern Ireland, a part of the United Kingdom.
However, as the UK left the EU single market, the only solution was to effectively create a customs border in the sea between Northern Ireland and the rest of the UK, to prevent unrestricted flow of goods from the EU through Northern Ireland.
The complicated negotiations and political bargaining on the issue are ongoing, as the central government is unable to fully satisfy Unionists’ requirements for complete lack of customs checks between parts of the UK.
The latest agreement, reaching in January 2024, reduced trade barriers and granted Northern Ireland more responsibility over the trade.
Our focus here is on assessing the shorter-term specific predictions made by official campaigners.
Employment
The UK was short of 1.8 million jobs by 2023 due to consequences of Brexit, according to a Cambridge Econometrics report, commissioned by the Mayor of London.
This figure represents the jobs that would have potentially been created if the UK stayed in the EU, and is in line with how much smaller the GDP is estimated to be.
The total number of jobs in the UK in 2024 is around 37 million.
It was estimated that in 2023, there was a shortage of 330,000 workers, particularly in the low-skilled sector.
Jobs in the steel industry dropped by a third since the referendum, as the British steel industry was in a huge crisis post-Brexit and required governmental assistance. In 2016 there were around 32,000 people working in the British steel industry, by 2023 only 21,180 remained.
There were more factors at play than Brexit itself, including predatory lending by a private equity firm and fluctuations in global demand for steel, however.
Employment in agriculture decreased slightly from 436,000 in 2019 to 419,000 in 2023.
Industries
In fishing, the results were disappointing, as many in the industry felt betrayed by the Leave campaigners.
The negotiations with the EU were difficult and ended much closer to the EU proposition than the UK's demands, especially on reducing EU catches in British waters.
British fishermen did not receive significant additional quotas in national waters, while largely received increased international waters quotas only for less relevant species.
Some EU fishermen retained their rights to enter British waters into 2026.
The industry faced labour shortages and falling exports.
Gross value added of the manufacturing sector grew over the years but did not reach the promised increase of £45 billion.
Nevertheless, manufacturing stayed relatively strong through Brexit and the pandemic and continues to grow as of today.
The British farming industry struggled over the past years, partly because of the workforce shortages and the withdrawal of EU subsidies.
Gross value added of the agriculture, forestry and fishing sector fell from £13.5bn in 2019 to £11.5bn in 2023.
The British economy lost around 5.5% of GDP, over £120 billion, as a result of Brexit alone, current estimates suggest.
The UK could have received £114 billion more in investment by staying in Europe, or a third of the current total.
This suggests that the economic under-performance was largely a result of the created uncertainty and disrupted investor confidence.
Overall public spending increased since 2016, and further since 2020.
While there were some cuts in certain programs like foreign aid, all major expenditures stayed level or increased, especially during the pandemic, resulting in a huge budget deficit of £240 billion in 2021.
Public services saw a lot of problems since 2016, especially the NHS in the wake of COVID-19, as the waiting times for patients dramatically increased.
Experts generally attribute this problem to long-term underinvestment in the NHS, rather than Brexit itself.
However, a major argument of the Leave campaign was that the money sent to the EU could be funnelled into the NHS instead.
We may expect some cuts in the future, but so far it does not seem that the estimated £40 billion in cuts can happen by 2030.
The effect of Brexit was to drastically reduce the number of migrants from the EU.
From 282,000 net gain in 2016, Britain now has a net loss of people to the EU of 51,000 per year, while EU citizens now constitute the majority of arrivals who were refused entry at the UK border.
Around 7.5 million EU citizens applied for the EU Settlement Scheme since 2016.
Meanwhile, the amount of non-EU migrants into the UK increased dramatically in 2022 and 2023, a year after the effective Brexit.
However, this should not necessarily be regarded as "the new normal", as the increase is driven by visa schemes for refugees from Ukraine and Hong Kong, as well as an influx of international students and healthcare workers.
One of the most debated topics during the campaign was how much can Brexit give (or cost) an average British household.
Many economics experts claimed that Brexit would have a negative impact on households, arguing that leaving the EU would lead to the loss of trade and investment, higher tariffs and weaker currency.
However, not everyone agreed with these forecasts and some supporters of Brexit claimed that leaving the EU would actually lower household costs by reducing regulations, increasing competition and strengthening global trade deals.
The specific prediction varied from leaflet to leaflet. Overall, we find “Leave” campaign to have predicted a £400 to £933 increase in household income from Brexit, while “Remain” predicted a loss of £450 to as much as £4000 per household.
By 2023, Brexit cost the average British household £850 per year, according to the National Institute for Social and Economic Research.
Analysis done by Cambridge Econometrics found that by 2023 Brexit contributed to a loss of £2,300 per household.
Studies tend to agree that the losses associated with Brexit are compounding over time and will therefore likely increase.
As of May 2024, 55% of Britons thought it was wrong to leave the EU, while 31% believe it was right.
Brexit is not a single event but a process that will continue to unfold and affect the UK, the EU and the rest of the world in various ways.
Today, experts tend to agree that Brexit had an overall negative effect on the economy, particularly through diminished investment and investor confidence.
The Remain campaign did a fairly good job at predicting these overall negative effects.
However, some benefits highlighted by the Leave campaign, especially to do with sovereignty, may be harder to quantify and take longer to become apparent.
For example, the war in Ukraine showed Britain’s ability to make important geopolitical decisions, such as supplying military aid to Ukraine, with greater independence from the EU.
In addition, potential future growth in industries like farming and manufacturing may strengthen the retrospective case for Brexit in the coming years.
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