Brexit. Why do Brits want Out of the EU?

Ken Clarke says legislation set to be revealed on Monday will be ‘seriously challenged’

The “vast majority” of peers will back attempts to block a bill by Boris Johnson’s government aimed at overriding parts of the Northern Ireland Protocol, according to Conservative party grandee Ken Clarke.

The controversial legislation – designed to take unilateral action to stop checks on goods agreed with the EU as part of the Brexit deal – will be published in the Commons on Monday.

But the former Tory chancellor said the radical plan will be “seriously challenged” in the upper chamber. “I expect to find a very large majority of the House of Lords will hold it up for a considerable time,” Lord Clarke told the Daily Mail.

“I personally, I am afraid, usually vote against the government when they are trying to break the rule of law,” he said – adding that Britain should abide by a “rules-based international order in which countries reach agreements and then stick to them”.

The Tory peer added: “I do not think the government should be allowed to negotiate a treaty, tell the public that it is a fine treaty, get it ratified by parliament, and then almost immediately start trying to break it.”
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Brexit is “largely to blame” for billions being lost in trade and tax revenues in recent years, according to a new study by top economists.

The Centre for European Reform (CEF) said that by the end of last year, Britain’s economy was 5.2 per cent – or £31bn – smaller than it would have been without Brexit and the Covid pandemic.

“We can’t blame Brexit for all of the 5.2 per cent GDP shortfall …. but it’s apparent that Brexit is largely to blame,” said John Springford, author of the CEF study.

The CER modelled the performance of a “doppelganger” UK – if the nation had remained inside the EU’s single market – using data from other advanced economies similar to the UK.

Mr Springford said “disentangling” the economic effects of Brexit and Covid in recent years was “difficult” – but said it was clear that the bigger negative impact had come from Brexit.

The economist argues that a huge gap between the current UK and his “doppelganger” economy had opened up before the pandemic struck in the spring of 2020.

Mr Springford said the sluggish economic performance after the end of lockdowns in 2021 also showed that the “sizeable” shortfall was “mostly Brexit and not Covid”.

“The UK ended Covid restrictions sooner than many of its peers, thanks in part to starting its vaccination campaign early in 2021,” he said. “That should have made its recovery from Covid faster than other countries, not slower.”

The CER study said it was “hard to avoid the conclusion that Brexit has severely curtailed GDP, investment and goods trade”.

The report added: “British politicians may find it difficult to ignore the central role of Brexit in the UK’s economic problems for much longer.”

It comes as British firms point the post-Brexit red tape which is continuing to create costly hold-ups in trade with the EU.

One seafood firm in Northumberland spoke out about the “ridiculous” paperwork which almost caused a £50,000 delivery to be destroyed, since a form signed 43 times did not include a printed name.

The Coquet Island Shellfish Company told the BBC the issue cost the firm up to £15,000 to sort out after several delays. “There have been no discernible benefits of Brexit. Everything takes longer and costs more,” said sales director Jane Pedersen.

An influential committee of MPs recently warned that it was uncertain whether the post-Brexit free trade agreements negotiated by Boris Johnson’s government will provide any “actual economic benefits”.

Is Brexit working? For diehards on each side, the answer is obvious. But for those who are interested in objective analysis, it’s vital to have a way at least to ask the question. That’s why we at UK in a Changing Europe set out, four key “tests” by which to assess the consequences of leaving the EU.

We observed that, while Remainers and Leavers disagreed vehemently about whether to remain in the EU, there was considerable common ground about what we, as a country, should be seeking to achieve. Generally, both sides argued that Britain should remain an open, outward-looking country; that both economic growth and social cohesion mattered; that we should invest in, and improve, our public services; and that we need to maintain Britain’s international influence, while preserving democratic control of our own destiny. Remainers and Leavers didn’t disagree about these objectives; the issue was whether Brexit would make achieving them easier or harder.

We concluded that Brexit could be judged a success – on its own terms – if, on balance, it passed the following tests. So what’s the story so far?

The economy and the public finances
Overall, the UK’s economic performance has been disappointing, but not disastrous, since the referendum, and since the implementation of the Trade and Co-operation Agreement with the EU. Three factors have weighed on growth – the sharp fall in sterling immediately after the referendum which has not been recovered, the continuing poor levels of business investment, driven in part by Brexit, and, since the implementation of the TCA, reduced trade.

The impact of the pandemic makes it very difficult to quantify these effects, but there is a clear consensus among independent economists that Brexit has made us poorer. The Office of Budget Responsibility’s current estimate is that Brexit has, so far, reduced UK GDP by about 1.5%, with a further reduction of 2.5% still to come. This would, in turn, translate to a reduction in about £12bn a year in tax revenues, rising to well over £30bn, partly offset by the UK’s reduced net contributions to the EU. The Centre for European Reform estimates that the UK has seen a growth shortfall relative to economically comparable countries of more than 5% over the period, although it recognises that not all of this is down to Brexit. These negative impacts are significant, albeit far from catastrophic.

By contrast, it is difficult to point to any significant overall economic benefits of Brexit to date. So while Brexit proponents can still point to potential future benefits, so far test one has been failed.

Fairness
Brexit promised to make Britain “fairer” in two ways: by boosting the relative wages of the low paid and by reducing regional disparities. While the referendum has spawned increased political interest in – and rhetoric about – the issue, there’s little to suggest that it has contributed to either of these goals.

In the pre-pandemic period, pay growth was higher at the lower end of the earnings distribution, but this was primarily driven by above-inflation rises in the national minimum wage, a policy that predated the referendum. Since the pandemic, and the introduction of the post-Brexit migration system, there have been widespread reports of pay rises in some sectors where reduced EU migration has reduced labour supply. However, as yet, this has not resulted in an overall improvement in the position of the low paid.

In fact, earnings inequality has widened compared to the pre-pandemic period, with the highest wage growth in the finance and ICT sectors. The top 1% appear to be doing particularly well. Meanwhile, there is no sign that regional disparities have narrowed, and they may in fact be widening: the ONS estimates that London, along with Northern Ireland, are the best performing regions. Other analysis shows that Brexit has reduced growth most in areas that are most dependent on manufacturing, especially in the North. So far, test two has been failed.

Openness
There is clear evidence that, as predicted, Brexit has had a negative impact on UK trade, although some aspects of the data remain puzzling. Export performance has been weak, but, contrary to expectations, that is particularly the case for non-EU exports. Meanwhile, imports from the EU have fallen sharply, with considerable evidence of substitution to non-EU sources – somewhat surprising given that the UK has yet to impose the full set of import controls on EU suppliers. It is notable that although the TCA notionally provides for UK-EU trade to be free of tariffs and quotas, this is not necessarily the case in practice, given the sometimes burdensome requirements to demonstrate eligibility. Overall, the OBR concludes that its estimate of a 15% hit to UK trade remains appropriate.

Meanwhile, however, the new post-Brexit immigration system has proved to be considerably more liberal in both policy and practice than predicted. While EU migration has fallen sharply since the referendum, and even more sharply since the pandemic and the introduction of the new system, it has largely or wholly been replaced by non-EU migration, with both study and work visas well above pre-pandemic levels, even after taking account of new visa requirements for EU citizens. This has also resulted in a shift in the sectoral mix of migrants for work, with large increases in the health and ICT sectors; this is also likely to mean that the average skill and salary levels of new migrants is higher than before Brexit. So overall the verdict here is mixed: negative on trade, but positive on migration.

Control
In formal terms, there is no doubt that Brexit has delivered; the European Communities Act, which enshrined the supremacy of EU law, has been repealed, the European Court of Justice no longer has direct jurisdiction in the UK (with some minor exceptions) and our contributions to the EU budget are being phased out. The major exception here is the Northern Ireland protocol, which remains very much in flux. The EU of course was not the only external impediment to control.

Some governmental plans to change procurement rules, for instance, were stymied by a need to abide by other international trade obligations. Beyond the legal position, it is arguable that the main impact of Brexit has been to transfer power to the executive, rather than Parliament or the public, as ministers have given themselves substantial powers to change retained EU law by secondary legislation.

Meanwhile, public opinion is mixed. Data from the British Social Attitudes Survey suggests that public trust in government fell during the prolonged political and parliamentary stalemate over Brexit, but recovered during the pandemic and with the resolution of the Brexit debate, returning to pre-Brexit levels, although levels of dissatisfaction and distrust remain high. However, on immigration – perhaps the issue where the lack of control was felt most strongly – there has been a very substantial and persistent move towards more positive attitudes and lower concern, among both those who voted Remain and those who voted Leave. While it is unclear whether this is associated with a sense of greater control – and the public still believes that the government is handling the issue very poorly – the shift is still very notable, and it seems plausible that it is associated, directly or indirectly, with Brexit. Overall, then, the verdict is broadly positive.

We will be debating the success or otherwise of Brexit for decades. However, that does not mean we cannot draw tentative conclusions about the results to date. On its own terms, Brexit has clearly not delivered either better overall performance or greater fairness: for most indicators, the opposite is the case. But while the UK has become a less open economy to trade, this is not the case for migration, where the optimistic case has largely prevailed. And while levels of public distrust and dissatisfaction with government overall remain high, Brexit itself may have improved matters somewhat, especially on immigration.

Jonathan Portes, professor of economics and public policy at King’s College, London, and Mathias Wosyka are from UK in a Changing Europe

Liz Truss risked a trade war with the EU and accusations of lawbreaking as she published legislation that would allow exports from Britain to Northern Ireland to follow either UK or EU standards and checks.

Publishing the Northern Ireland protocol bill, Truss said the legislation would “fix” issues with the post-Brexit protocol by easing checks for firms selling goods from Britain destined for Northern Ireland rather than the EU. It would also scrap the European court of justice as the arbiter of trade disputes and move to an independent mechanism.

However, the EU, legal experts and even some Conservative MPs have warned that the move is illegal under international law as it gives ministers the powers to disapply parts of the protocol unilaterally, without the agreement of Brussels.

One of the biggest changes would be the introduction of a choice for British firms exporting to Northern Ireland between meeting EU or UK standards on regulation, which are expected to increasingly diverge. It would also allow the creation of a green lane allowing fewer customs checks for goods destined for Northern Ireland and a red lane with existing checks for goods destined for EU countries.

Two further measures included bringing Northern Ireland’s tax break and spending policies into line with the rest of the UK and changing oversight of trade disputes so that they are resolved by independent arbitration rather than the European court of justice.

The legislation will encounter serious opposition in both the House of Commons and Lords, with doubts over whether Boris Johnson has support for it to pass. The bill has some critics on the Eurosceptic right, including Northern Ireland’s DUP, as well as some on the one nation centrist wing of the Tories.

Government sources said a vote on the bill would hopefully take place before parliament breaks up for summer recess but it would want to see some progress towards power-sharing returning in Northern Ireland first, which the DUP has been blocking.

A majority of members of the Northern Ireland assembly – from Sinn Féin, the SDLP, Alliance parties – wrote to Johnson on Monday saying they could not support the move, warning it “flies in the face of the expressed wishes of not just most businesses, but most people in Northern Ireland”.

The assembly is due to vote on whether it gives it consent for the operation of the protocol in 2024 – four years after it came into force.

With opposition mounting, there are some doubts among MPs that the legislation will get anywhere. The government has been insisting it would still rather find a negotiated solution to fix problems with the protocol. But Ireland said on Monday that Truss had not engaged in negotiations with the protocol in a meaningful way since February.

A phone call between Truss and Simon Coveney, Dublin’s foreign affairs minister, last just 12 minutes on Monday morning. A spokesman for Ireland’s Department of Foreign Affairs said: “Mr Coveney said publishing legislation that would breach the UK’s commitments under international law, the Brexit withdrawal agreement and Northern Ireland protocol is deeply damaging to relationships on these islands and between the UK and EU.”

David Lammy, the shadow foreign secretary, said it was a “desperate attempt by Boris Johnson to distract from the drama of his leadership crisis” and called on the government to publish its legal advice in full.

“It risks creating new trade barriers in a cost of living crisis and will only bring more uncertainty for the people of Northern Ireland who are trying to make the protocol work,” he said.

“Britain should be a country that keeps its word. By tearing up the protocol it negotiated just a couple of years ago, the government will damage Britain’s reputation and make finding a lasting solution more difficult.”

Legal action
More immediately, the EU is likely to restart an old legal complaint and trigger new ones over the government’s alleged failure to implement parts of the Northern Ireland protocol. Under the protocol, Northern Ireland remains in the EU’s single market for goods and the European court of justice has jurisdiction.

Last March Brussels started legal action against the government, after the government announced that supermarkets and their suppliers would not have to comply with a host of EU food rules, a unilateral extension of a grace period. The EU suspended its legal action in July as a goodwill gesture to help restart talks, but is now likely to revive this case, which could end with the ECJ imposing daily fines.

The European Commission has other gripes about British implementation of the protocol: including a unilateral decision to waive some checks on cold meats and alleged failure to provide data and build border inspection posts. The complaints, which the UK disputes, could also end up in the ECJ.

However, as one of the expected clauses in the bill is the removal of ECJ jurisdiction, this legal action is one of the weaker weapons in the EU’s arsenal.

Make life difficult
British participation in the EU’s €96bn (£81bn) Horizon research programme? A memo on financial services to create a talking shop on regulation? A deal on returning asylum seekers to the EU? No chance. These mooted agreements will remain in the deep freeze for the duration of the dispute over the Northern Ireland protocol. The EU’s ambassador to London, João Vale de Almeida, has already “regretted” that researchers were “collateral damage” in the protocol dispute. While London and Brussels will continue to cooperate on sanctions against Russia, any positive agenda will remain stalled.

Individual member states may also choose to put pressure on the government; for instance, France could step up checks on British goods entering the EU. More onerous checks will mean more lorry queues at Dover.

Trade war
The ultimate penalty is tariffs on British goods, or even the suspension of the entire trade and cooperation agreement between the EU and the UK. When the EU got into a trade war with Donald Trump’s White House, it imposed tariffs on Harley Davidson motorbikes, jeans and bourbon. So it can be expected that Brussels would target iconic British goods in the event of a trade war with the UK.

But imposing tariffs is not a quick option. The EU has to go through the exacting dispute-settlement process outlined in the Brexit withdrawal agreement. First the case would go to the ministerial joint committee led by the foreign secretary, Liz Truss, and the European Commission vice-president Maroš Šefčovič. The next step would be an independent arbitration panel that can impose fines on the guilty party. Only in the event of persistent rule-breaking can the EU-UK trade deal be suspended. EU governments, which are also grappling with the soaring cost of living, hope to avoid what they see as a pointless, costly row.

A majority of MLAs in the Stormont Assembly have signed a joint letter to Prime Minister Boris Johnson stating their opposition to proposed legislation to amend the Northern Ireland Protocol.

The letter has been signed by 52 of the 90 MLAs, representing Sinn Fein, the SDLP and the Alliance Party.

A cabinet row has broken out over Jacob Rees-Mogg’s plans to axe all remaining EU laws in under four years, given concerns about the feasibility of combing through at least 2,000 pieces of legislation while the civil service faces severe cutbacks.

The Brexit opportunities minister is pushing for the laws carried over after Brexit to expire by a “cliff-edge” deadline of 23 June 2026, marking 10 years since the EU referendum.

However, the Guardian has learned that at least two cabinet ministers have railed against the proposal, while officials have said the goal is “literally impossible” – particularly as Rees-Mogg is also spearheading the cull of the civil service.

In a letter to Rees-Mogg, North Somerset MP, George Eustice, the environment secretary, said that “messing around” with some rules would mean an additional cost to businesses and be a waste of officials’ time, while senior Whitehall sources voiced fears of a mass deregulation drive by the back door.

The pushback came amid wrangling within government about how to better promote the “benefits” of Britain’s independence. Brussels is set to launch legal action against the UK’s bid to unilaterally override the Northern Ireland protocol on Wednesday.

Rees-Mogg plans to publish a “Brexit freedoms” bill this summer. In a letter to cabinet colleagues seen by the Guardian, he proposed 23 June 2026 as the date when a “sunset clause” should be activated, causing all “retained EU law” to fall off the UK’s statute book. Alternative dates “significant in the Brexit calendar” are also being considered, such as 31 January 2030, which would mark a decade since Britain left the EU.

After a Whitehall review found there were 2,194 retained EU laws still in existence across 180 unique policy areas, Rees-Mogg said an “impetus for change” was needed “to drive momentum for a regulatory reform process that would remove unnecessary burdens”.

Ministers were ordered to assess the laws affecting their departments and told that some with higher levels would “need to allocate significant resources” – but that no extra money would be provided.

Given existing plans to axe 91,000 civil servants, Rees-Mogg said ensuring the deadline is met “will demand careful prioritisation of policy objectives across government”.

A team is to be set up in the Cabinet Office to help triage those laws that are “a high priority” for keeping, Rees-Mogg added, with a dashboard monitoring their progress and overseen by a new Brexit opportunities star chamber, comprising ministers and policy officials.

Multiple laws that ministers may want to retain could be contained within a single form of secondary legislation known as a statutory instrument (SI), Rees-Mogg assured them, but he added: “We cannot predict how complex or straightforward the SIs will be.”

An annex to the letter to the cabinet also admitted there was a risk of “increases in litigation” and that while the government would commit publicly to not breaking any international legal obligations, Rees-Mogg was “considering” whether to make this more explicit in the text of the bill.

In a sign of the number of laws that could be dropped or watered down, Rees-Mogg said the drive would “be deregulatory in ambition, but we intend to allow a reasonably wide interpretation of what is regulatory that is not limited to reducing the cost to business” and added: “Brexit is an opportunity to create our own rulebook.”

He added that because tax was a “particularly complex” area of retained EU law, it would be addressed in a “bespoke” bill sponsored by the Treasury.

Cabinet ministers were given less than two weeks to respond, with some missing the deadline – taken as a sign of the level of unhappiness.

In his letter, Eustice said such an approach “could mean that time is wasted on minor issues when I have been trying to focus my officials’ time on the flagship bodies of EU law that have the greatest impact” – such as the habitats regulations and nitrates directive.

Eustice said he feared the “pressure of an early sunset cliff edge would mean that officials would be spending too much time” looking at laws of lesser importance, adding: “Doing all of them at once would be misplaced energy.”

He also said that “messing around” with the minutiae of some retained EU laws, such as product composition or labelling, “costs businesses money and is unlikely to make much difference”.

Another member of the cabinet admitted there was disquiet in Boris Johnson’s top team about the issue. “This is not a debate that we are seeking to have in public,” the minister said.

Senior Whitehall sources said it would be “literally impossible” for departments to wade through hundreds of retained EU laws and come up with plans to retain, amend or drop them with no extra resources.

They pointed out that a substantial number of the laws adopted by the EU were lobbied for by the UK government when Britain was still a member, or adopted as a result of obligations under international organisations.

A government insider suggested Rees-Mogg’s plan might not be adopted due to staunch opposition, adding that many hours of parliamentary time would have to be set aside for adopting or amending retained EU law at the expense of passing other key bills before the next general election.

Catherine Barnard, a professor of EU law at Cambridge University and deputy director of the UK in a Changing Europe thinktank, said: “A sunset clause is an effective but crude mechanism for bringing to an end whole swaths of retained EU law, much of which still serves a valuable function. Replacing worthwhile EU rules with a domestic variation will take significant civil servant and parliamentary time when the country has other pressing priorities.”

A spokesperson for Eustice said they would not comment on the leaked letter. The Cabinet Office said the Brexit opportunities bill would “make it easier to amend or repeal outdated EU law which does not suit the UK, ending the ‘special status’ that EU law continues to enjoy in our legal framework and saving businesses at least £1bn in burdensome EU red tape”.

The bloc will now restart the infringement procedure it first launched against Britain last year when the UK unilaterally extended a grace period that applies to trade on the island of Ireland.

That action had been put on hold in September 2021 as both parties tried to find joint solution. In addition, the EU will kick off further action against Johnson's government for a perceived failure to carry out necessary controls under the EU rules, and to provide trade statistics data as required under the protocol

Johnson needs to go!