How's That 'Brexit' Thing Going?

We're all worse off.

If you walked into a British supermarket this past winter, you were likely to see bare shelves in the salad aisle. Customers might have been limited to purchasing lettuce and tomatoes, if there were any lettuce or tomatoes to be found in the first place. Ask the grocers, and you’d hear technical explanations for the scarcity. High energy prices raised costs at British greenhouses; imports from warmer countries were curtailed by bad weather in Southern Europe. Behind all of these situational explanations, however, loomed a larger problem.

From the time a tomato is harvested, every minute counts en route to the purchaser’s table. In March, the BBC reported that Britain’s departure from the European Union has added 10 to 20 minutes of additional paperwork to every truckload of tomatoes shipped from Spain—longer if the truckload mixes different produce varieties. Ten to 20 minutes may not sound like much. But multiply that burden by thousands of trucks, squeeze the trucks through the bottleneck of the single underwater tunnel that connects Britain to freight traffic from Europe, and costs and delays accumulate. The result: winter tomato gluts on the continent, winter tomato shortages in the United Kingdom.

The temporary disappearance of some fresh fruits and vegetables for a few weeks in winter may be only a nuisance. Yet such nuisances are ramifying throughout the British economy, signals and symptoms of larger, system-wide trouble. British consumers are spending less on new clothes and shoes than they did in 2018 and 2019. The British are holding on to their cars longer: The average age of the vehicles on British roads has reached 8.7 years, a record. The British made about 2 million fewer trips abroad in 2022 than they did in 2018 and 2019, an almost 20 percent decline. Lingering COVID concerns offer a partial explanation. But the UK and most of its European Union neighbors had dropped most travel restrictions in January 2022 and the remainder by March.

Altogether, Britain is expected to be the worst performing of the world’s 20 biggest economies this year. The British government’s official forecaster predicts that after-inflation household incomes will decline by an average of 7.1 percent over the three years ending in spring 2024. On the present trajectory, Britain will not return to 2019 levels of disposable income until 2027. By 2024, the average British household will likely have a lower living standard than the average household in Slovenia. On present trends, the average British household will be poorer than the average in Poland by 2030.

The pandemic has not helped, but the slowdown of the British economy cannot be explained by COVID. Italy has suffered more deaths from COVID than any other major European country has, yet its economy had mostly recovered to pre-pandemic levels by the end of 2021.

Britain is now paying the price for its decision to leave the European Union. Britain voted to exit in the summer of 2016. The departure was formalized on December 31, 2020. Since then, new barriers to trade, investment, and movement have risen between Britain and its nearest neighbors. Investment in Britain has tumbled, and the British economy has shrunk. By one authoritative estimate, Britain is 4 percent poorer today than if it had stayed in the EU.

Many in the British government are reluctant to acknowledge this reality. Huw Pill, the Bank of England’s chief economist, lamented in a recent podcast interview, “What we’re facing now is that reluctance to accept that, yes, we’re all worse off.”

These costs don’t necessarily make Brexit a “mistake.” Brexit was a trade: less prosperity for more sovereignty. Countries reasonably make such trades all the time. My native Canada would dramatically increase its prosperity if it abandoned its sovereignty and merged with the United States. By their continued independence, Canadians implicitly choose otherwise, and nobody criticizes them for “Canxit.” They know the cost, and they accept the cost as worth it.

But the British were not honestly alerted to the cost of their choice. In 2016, future Prime Minister Boris Johnson campaigned for Brexit in a big red bus carrying a huge printed message: We Send he EU £350 Million a Week. Let’s Fund Our NHS Instead.

The British were promised that Brexit meant more: more resources for public and private consumption. Instead, Brexit has predictably turned out to mean less, and the British are surprised, baffled, and angry. (...)

The British will vote in a national election probably sometime in 2024. You would think this coming election would be the appropriate time to assess the country’s choices and consider whether to choose a different path. You’d think wrong.

by David Frum, The Atlantic |  Read more:

Image: Matthew Horwood/Getty

[ed. "Thank you sir, may I have another?" (Animal House/YouTube)]