The Resolution Foundation’s think tank report, in collaboration with the London School of Economics, said leaving the EU would make Britain “poorer” during the 2020s. The study said the direct impact of Brexit was already clear, with a “devaluation due to devaluation” increasing the cost of living for households and reducing investment. The survey estimated that labor productivity would decline by 1.3 percent by the end of the decade through changes to trading rules, contributing to weaker wage growth. Economists say the real pay would be 70 470 lower per employee each year, on average, than it would have been if Britain had chosen to stay in the EU. Production in the UK fisheries industry is expected to fall by 30 per cent and some workers will face “painful adjustments” over the next decade, the Resolution Foundation said. The report added that the north-east of England – part of the red wall that Boris Johnson Conservatives were able to turn blue in the last election – is expected to be hit hardest by Brexit, as its companies are heavily dependent on exports to the EU. The UK may not have seen much of a relative decline in its EU exports, which some have predicted, but imports from the EU have fallen faster than those from the rest of the world, the study suggests. The report said Britain had fallen 8 per cent in “trade openness” – trade as a share of economic output – by 2019, losing market share in three of the largest markets for non-EU imports in 2021, the US and Canada and Japan. The full effect of the Trade and Cooperation Agreement (TCA) reached with the EU will take years to be felt, the authors say, but it is clear that the nation is moving towards a more closed economy. Sophie Hale, a key economist at the Resolution Foundation, said Brexit represented “the biggest change in Britain’s economic relationship with the rest of the world in half a century”. He said: “This has led many to predict that it would cause a particularly large drop in exports to the EU and would fundamentally reshape the British economy to further processing.” “The first of these has not taken place and the second seems unlikely to do so,” the economist added. “On the contrary, Brexit has had a more pervasive impact by reducing the UK’s competitiveness and opening up to trade with a wider range of countries. “This will ultimately reduce productivity, but also the real wages of employees.” A recent study by the Center for European Reform (CEF) found that Brexit was “largely responsible” for the billions lost in trade and tax revenue in recent years. The think tank said that by the end of last year, Britain’s economy was 5.2 percent – or 31 31 billion – smaller than it would have been without Brexit and the Covid pandemic. “We can not blame Brexit for the entire deficit of 5.2 percent of GDP; but it is obvious that Brexit is largely responsible,” said John Springford, author of the CEF study. The moment comes when the Johnson government has been accused of hypocrisy for plotting to cut controls on the salaries of the city’s bosses, while calling for a pay cut in the public sector. No. 10 Chief of Staff Steve Barclay is said to have sent a letter to Chancellor Rishi Sunak with a plan for “deregulation measures to reduce the overall business burden” and attract companies after Brexit. Confirming the plan, Downing Street said the government was investigating how non-executive executives would be paid, not how much – including the removal of “unnecessary restrictions on the payment of non-executive directors’ shares”. But Labor has accused the government of using “two sets of rules” for wages – one for high-income people in the city and another for workers elsewhere.
