Former Brexit minister Lord Frost admits possible blow to UK trade from quitting EU
(Picture: PA Archive)Britain’s former Brexit negotiator Lord Frost admitted on Thursday that quitting the EU may have hit goods exports by five per cent.
In a speech on the sixth anniversary of the Brexit referendum, the peer said that it was “obvious” that leaving the customs union and single market would have some transitional impact on the UK’s trade.
“For what it is worth I think it is reasonable to assess the figures as plausibly showing that our goods exports are around 5% lower than what they would otherwise have been, but that the performance is continuing to improve, and this figure may well change further as the figures normalise,” he said.
“I do not think this will have any measurable impact on our GDP one way or another.”
He added that the true economic impact of Brexit may never be known.
The former minister said it may never become clear whether leaving the EU had brought any economic dividend as there was “so much else going on”.
Lord Frost, who negotiated the Brexit deal before resigning over the Government’s broader direction, said: “I’m not sure it is ever going to be clear in that sense whether it’s succeeded or failed because so much else is going on and extracting the causality about this is always going to be extremely difficult.”
The peer insisted Brexit was working, although it was still unfinished.
He said: “We have no cause for regrets about the decision the country has taken and the solutions to the remaining problems are not to be found in going backwards, but in completing the process and following through on its logic.”
On whether Brexit is working, many MPs would question that given the political turmoil it has created over Northern Ireland, the failure to strike a trade deal with the US and travel delays facing British holidaymakers when arriving at border control in some airports in other parts of Europe.
On the economic impact, Lord Frost said there was “a huge amount of noise in the figures” from the pandemic, supply chain disruption and the war in Ukraine, making it “hard to be confident what if any changes in UK trade are due to Brexit”.
While he noted that there had been “some transitional impact on trade”, he said comparisons with other major economies suggested there was “no obvious Brexit-related lag”.
But he urged Brexit supporters to be “honest” about the “trade-offs” involved in leaving the EU instead of “pretending nothing is going on”.
He said: “I don’t think it’s reasonable to say, as some pro-Brexit people do, ‘nothing to see here in the figures, don’t bother looking at them, it really is not important’.
“I don’t think that’s fair, you have to look at the figures, they’re telling you something, I just don’t believe they bear the constructions that are put on them at the moment.”
He questioned reports, such as by the Centre for European Reform, which found Brexit had delivered a £31 billion blow to the UK’s GDP.
He also insisted that the “crucial test” was about democracy, arguing that Brexit had delivered democracy because “we can now change everything by elections”.
He said: “Democracy counts. Brexit automatically delivers democracy. So it is working.”
The peer went on to say that Brexit was “not fully complete yet”, with more work needing to be done to address the Northern Ireland Protocol and remove the UK from the jurisdiction of the Court of Justice of the European Union.
Meanwhile, Downing Street was unable to say on Thursday whether the Government had carried out any economic assessment at all of the impact of Brexit despite reports that it had caused multi-billion pound damage.
The Prime Minister’s official spokesman was asked whether any such work had been done into the cost to the economy of quitting the EU.
He responded: “I will have to take that one away.”
The No10 response came just hours after Brexit minister Jacob Rees-Mogg refused to say how quitting the EU had hit Britain’s economy.
He also would not say if the Government had made any assessment of the economic harm or benefits of Brexit.
Instead, he lashed out at other reports, which highlighted the harm to the economy caused by quitting the EU, suggesting previous such studies were “bilge”.
The Treasury has so far failed to make public any assessment of the economic impact of Brexit and the Bank of England has been accused of being reluctant to talk about it to avoid upsetting the Government.
Mr Rees-Mogg’s comments came just hours after a new report warned that Brexit will hit workers’ real wages by nearly £500-a-year and damage Britain’s competitiveness.
The Resolution Foundation study, in collaboration with the London School of Economics, said the immediate impact of the referendum result has been clear, with a “depreciation-driven inflation spike” increasing the cost of living for households, and seeing business investment falling.
The UK has not seen a large relative decline in its exports to the EU that many predicted, although imports from the EU have fallen more swiftly than those from the rest of the world, the study suggested.
But it estimated that labour productivity will be reduced by 1.3 per cent by the end of the decade by the changes in trading rules alone, contributing to weaker wage growth, with real pay set to be £470 per worker lower each year, on average, than it would otherwise have been.
