Brexit vote cost the UK economy five years says chief economist
The UK Chief Economist at commercial property specialist Colliers has highlighted how the economy lost five years of momentum as a result of the political logjam that followed the referendum result that led to Brexit.
In a market overview for the fifth anniversary of the 52 per cent vote in favour of leaving the EU, which was announced on Friday 24 June 2016, Dr Walter Boettcher said: “In my mind, Brexit was flawed, not necessarily in its conception (compelling pros and cons can be argued), but by implementation with less than a referendum supermajority.
“The political logjam that followed was inevitable and cost the UK five valuable years. The time may have been better spent entrenching recovery from the Global Financial Crisis by encouraging public and private investment across the UK.”
However, Dr Boettcher noted that while the 2016 referendum vote that led to the UK leaving the EU had interrupted the regional rebalancing programme instigated by the then Chancellor George Osborne, it was now being revived by the present government within a context of increasing stability and business confidence.
He said: “The fact that recent business confidence indicators have reached record highs may have much to do with the successful UK vaccine rollout, but it also reflects in large measure, greater UK political stability arising from the 2019 general election as reaffirmed in the recent local elections in 2021. From a business perspective the most disruptive Brexit impact was political and regulatory instability which made business planning well-nigh impossible. This disruption dissipated rapidly after the general election until the Covid discontinuity intervened.
“From a national perspective, Brexit interrupted the regional devolution and development agenda that was heralded in the UK chancellor George Osborne’s Northern Powerhouse speech in 2014. Action was delayed by the Scottish Referendum shortly after the speech, and by the 2015 general election, but the Brexit referendum in 2016 broke the back of this agenda decisively as it led to the resignation of the Prime Minister, David Cameron, bringing down his government and the individual proponents of this agenda.
“However, the regional rebalancing idea did not die. Instead, it was reinvented recently as the ‘levelling up agenda’ and formed a basis for the current UK government manifesto. Only now is it being pursued again with greater conviction.
“Imagine where the UK might be if the last five years were used in pushing forward with large-scale investment in regional infrastructure and development. Surely, the positive transformations would already be apparent, if only for the strong economic multiplier effects of construction and development.
“In this respect, the UK is now on a positive track again, although Brexit fallout will be with us for a while longer, like a lingering guest at a party that ended some time ago. The Northern Ireland Protocol presents challenges and another Scottish Referendum may be looming, but numerous hurdles must be navigated before such a referendum can take place.
“This provides the UK government with time to manage possible new constitutional settlements for all the UK devolved regions within the progressive environment of regional ‘levelling up’ and investment in infrastructure and regional development.”