With Liz Truss resigning the UK has to face another immense political crisis. The last few years have not been kind to Great Britain, and it can all be traced back to one thing: Brexit.
The United Kingdom, once a beacon of stability and growth in Europe, is now facing its worst political and economical crisis in decades. Yesterday, UK Prime Minister Liz Truss resigned from her post, marking the shortest term ever served by a British PM: 45 days. Downing Street will now welcome its fifth tenant in six years and they will have the unenviable task of steering the ship back on sail.
But this unprecedented crisis in British politics can be traced back to one and only reason: Brexit. Since the 2016 referendum, when the majority of the British population voted for leaving the European Union, the UK has never been the same. A plethora of Tory leaders tried again and again to make Brexit work, but all they could achieve was an objectively horrible deal for them.
Then, two major international crises came one after the other, shaking every market in the world. First it was the Covid-19 pandemic, then it was the invasion of Ukraine by Russia. The entire world was economically and politically shocked by these events, but the UK still achieved a far worse performance than everybody else.
There is a pattern and it can be traced back to Brexit. We just need to look at the numbers to see it.
Why Brexit made everything worse
The whole idea of Brexit relied on the concept of economic independence. Now, the UK would be able to trade with anyone they wanted without consulting the EU. What they haven’t considered, however, is if other people would want to trade with them or not.
After Brexit there was a diaspora of businesses from the City of London to other, more convenient European markets. British and foreign businesses did not want to be isolated from the biggest trade union in the world. At the same time, the EU had no interest in British goods, as they could find the same quality products but at a cheaper price.
Looking at the sheer numbers, trade growth by GDP was smaller in the UK compared to the rest of the G7. And the same goes for the number of UK’s trading partners compared to its international allies.
So, business growth plateaued after 2016 and definitely plummeted with Covid. The small growth that came in 2021/2022 was nothing compared to the EUs. The result is that projected GDP growth for 2023 for the United Kingdom is precisely 0%, while the EU average is +2.8%.
According to a report by the Financial Times, Brexit will impair UK’s growth by 4% annually. Those are billions of pounds that simply vanished from the UK’s coffins, billions of pounds that would otherwise exist without Brexit. By comparison, the only trade deals the UK struck after Brexit (that didn’t already exist through the EU) will increase yearly GDP by 0.08%.
And this is without mentioning UK’s labor shortage, inflation (constantly higher than the EUs) and border friction in Northern Ireland.
We can safely say, after six years of mayhem, that Brexit was not a good idea. And the worst thing for the UK is that nobody in the political spectrum can admit it. If either the Labour or the Tory party admitted it, they would immediately lose crediblity to the public.
The damage of Brexit is already done. And it will be difficult to comeback for at least a whole generation.
Argomenti
