Brexit isn’t working, and Labour must be honest about it with Britain’s electorate | Phillip Inman

Those who would blame Brexit for most of Britain’s ills have struggled to come up with unequivocal figures to support their cause. The pandemic muddied the economic waters and gave supporters of leaving the European Union space to argue that remainers had overplayed their hand.

But as Christmas approaches, and with it the second anniversary of the UK’s exit from the single market and customs union, it is clearer than ever that the Brexit project is accelerating a long decline in the UK’s ability to pay its way in the world.

Whether it was the Corbynite fantasy of Brussels as a neoliberal project taking orders from multinational lobbyists or the free-market thinktanks’ scenario of a socialist citadel obsessed with overbearing regulation, the evidence that they were wrong about leaving as a route to unbridled economic success is hard to deny.

Last week, research from Ireland’s Economic and Social Research Institute (EISR) further strengthened the remainers’ case, building on an earlier study by the London School of Economics (LSE).

The EISR found trade from the UK to the EU had fallen 16% on the levels anticipated had Brexit not happened. Meanwhile trade from the EU to the UK was even lower, down by 20% on the same measure.

These are not the metrics that Brexit supporters would use. They point to figures showing how goods trade between the EU and UK recovered most of its previous level in value terms following the sharp fall in the early months of 2021.

Prospective Tory leaders Boris Johnson and Rishi Sunak, in this respect singing from the same hymn sheet, would also argue that the impact of Brexit can vary depending on what UK and EU data is used. As the EISR says, these can give varied results depending on the data source and the comparison group.

It is possible to say this about most statistics, so it is worth paying attention to the overarching conclusion of the Irish study, which is that the modest recovery in the UK’s trade over the past year leaves it well below the levels that would have been expected without Brexit.

In a similar vein, the LSE said in a joint report with the Resolution Foundation thinktank that leaving the EU dealt a blow to Britain’s productivity. Research published in the summer estimated that labour productivity – a key measure of output per hour of work – would be down by 1.3% by 2030. It blamed a decline in the openness of the British economy after Brexit, equivalent to losing a quarter of the efficiency gains achieved over the past decade.

Compounding the misery, it showed that dependence on imported food and other goods was adding to inflation and the pain for household finances. We also know that Brexit has made labour shortages worse – and in a bizarre act of self-harm, the government has cut budgets for skills training.

The Peterson Institute in Washington also looked at trade openness after Brexit and found that it had fallen by 6% in the UK. By contrast it increased by 13% in Italy. In October, despite the war in Ukrai

ne, Italian goods exports remain higher than in 2019 while the UK’s are lower.

Many economists think the trade situation is unlikely to bottom out because they expect a decline in the UK’s services exports to accelerate.

The EU no longer recognises many British professional qualifications. Collaborations between universities on either side of the channel are finding it difficult to secure funding, even if they manage to exchange academic research and staff.

There are fears that the financial sector has only just begun to suffer death by a thousand contract terminations. Ambitions harboured by Paris and Frankfurt to build up their finance industries were brushed aside as a joke a few years ago. Now they are bearing fruit.

Some would be glad to see bankers, private equity managers and hedge funders in reduced circumstances, but in the short term, these industries earn huge amounts of the foreign exchange with which the UK buys much-needed imports.

While Brexit to some meant taking control of immigration, its economic success was supposed to be measured in the greater dynamism of a trade sector made fat and lazy by easy access to EU markets.

It has been said before, but Labour will need to tackle the failed Brexit experiment head on, or risk managing an accelerated decline when it eventually gets the keys to Downing Street.

There are plenty of voters from all income bands who voted for Brexit and will resist buyers’ remorse. Unless Labour MPs talk to them openly about the pain it is going to cause, why would anyone change their mind?