by Frank Schnittger
Sun Feb 6th, 2022 at 03:09:53 PM EST
The `benefits' of Brexit
On the same day that Boris Johnson was dismissing multiple calls on him to resign after Sue Gray's "Partygate" synopsis, the UK's cabinet office quietly slipped out a 105 page document called "The Benefits of Brexit". It was almost as if it didn't want anyone to read how exactly Britain was "capitalising" on its exit from the EU. So which dividends was it trumpeting?
1 Blue passports. Westminster has doubled down on counting the return of "iconic blue passports" as one of the upsides of Brexit, despite there not being any EU law dictating passport colour.
2 Crown symbol. Brexit allegedly means being able to put the crown symbol on pint glasses "in a fitting tribute to Her Majesty's Platinum Jubilee". Again, this could have happened while the UK was still in the EU.
3 Tampon tax. VAT on menstrual products has now been abolished in the UK, which is great, to be fair. Of course, it could also have avoided the "tampon tax" the way the Republic did: by having a pre-existing zero rating.
4 Wine time. The moment has arrived to "supercharge" the production of English and Welsh wine, the sales trajectory of which is now unhampered by "burdensome EU regulations".
5 Being the best. The UK will become the "Best Regulated Economy in the World", while a "Best of Britain" campaign will "make the case around the world for British values" and the UK border will also, apparently, become "the best in the world".
So now you know. You can have supercharged English or Welsh wine with a crown symbol on the glass.
On the other hand, according to Wiki:
According to one study, the referendum result had pushed up UK inflation by 1.7 percentage points in 2017, leading to an annual cost of £404 for the average British household. Studies published in 2018 estimated that the economic costs of the Brexit vote were 2% of GDP, or 2.5% of GDP According to a December 2017 Financial Times analysis, the Brexit referendum results had reduced national British income by 0.6% and 1.3%. A 2018 analysis by Stanford University and Nottingham University economists estimated that uncertainty around Brexit reduced investment by businesses by approximately 6 percentage points and caused an employment reduction by 1.5 percentage points. A number of studies found that Brexit-induced uncertainty about the UK's future trade policy reduced British international trade from June 2016 onwards. A 2019 analysis found that British firms substantially increased offshoring to the European Union after the Brexit referendum, whereas European firms reduced new investments in the UK
Longer term impacts are described as follows:
2019 and 2017 surveys of existing academic research found that the credible estimates ranged between GDP losses of 1.2-4.5% for the UK, and a cost of between 1-10% of the UK's income per capita. These estimates differ depending on whether the UK does a Hard or Soft Brexit. In January 2018, the UK government's own Brexit analysis was leaked; it showed that UK economic growth would be stunted by 2-8% for at least 15 years following Brexit, depending on the leave scenario.
According to most economists, EU membership has a strong positive effect on trade and, as a result, the UK's trade would be worse off if it left the EU. According to a study by University of Cambridge economists, under a hard Brexit, whereby the UK reverts to WTO rules, one-third of UK exports to the EU would be tariff-free, one-quarter would face high trade barriers and other exports risk tariffs in the range of 1-10%. A 2017 study found that "almost all UK regions are systematically more vulnerable to Brexit than regions in any other country." A 2017 study examining the economic impact of Brexit-induced reductions in migration found that there would likely be "a significant negative impact on UK GDP per capita (and GDP), with marginal positive impacts on wages in the low-skill service sector." It is unclear how changes in trade and foreign investment will interact with immigration, but these changes are likely to be important.
So what does the actual UK trade data say?
UK export market share (UK exports relative to total imports in the countries the UK exports to) continues to decline even faster than the most pessimistic forecasts, while import penetration (the degree to which UK domestic demand is satisfied by imports remains broadly in line with forecast declines.
Meanwhile Irish Exports to the UK are booming while imports have decline precipitously...
While goods imports into Ireland from the UK as a whole have plummeted by 45pc, imports into Ireland from Northern Ireland have almost doubled (up 90pc) since January 1, the Economic and Social Research Institute (ESRI) said yesterday.
UK imports as a share of total Irish imports have fallen by almost a third since 2015, the year before the Brexit referendum, from 33pc to 12pc. Exports to the UK - excluding food and drink - have held up better, the ESRI found.
"It has become more expensive and more difficult for Ireland to import from Great Britain," ESRI research professor Martina Lawless told a Seanad committee.
But trade with Northern Ireland is coming from a low level and is not able to offset the high losses coming from the rest of the UK, though the share of Northern Irish trade in total Irish imports almost trebled since 2015.
"Northern Ireland, as a relatively small economic unit, is not able to replace all of the trade that we were getting in from Great Britain, and some of that has been diverted actually further afield," Prof Lawless said.
The data confirms recent Dublin Port figures showing trailer and container trade with Great Britain is down 21pc since January, while direct trade with Europe is up 36pc.
But who cares about these dry economic figures when you can have your "iconic" blue passport back, and the world is only waiting to lap up "the best of Britain" through the best borders in the world?