The Labour Government has said that getting growth in the UK economy is the key driver in fixing the country. Yet it fails, repeatedly, to pull the one lever that would dramatically do this, and that is to fix Brexit. Without doing so, expect budget tax rises each year to 2029!
It’s quickly become very clear that the failure of the new Labour Government to fix Brexit as soon as possible post-election, and to then compound the error by raising taxes in their first Budget, has prolonged and worsened the agony of Brexit. To make matters yet worse, they have lost economic credibility with investors, entrepreneurs, business owners, farmers and working people, making the chance of them winning another election very unlikely indeed.
Through a lack of action by the Labour Government, Brexit is causing significant economic strife for all, continuing to drive a cost of living crisis through higher inflation and interest rates, and what was previously a Conservative problem has now become a Labour problem. As we all contend with our poorer lives, the wider political agenda has been hijacked and our ills are blamed once again on foreigners and “out of control” immigration.
What we now witness is the current Government, the former Government and those parties currently riding high in the polls, all posturing with populist soundbites. None will face up to the fact that Brexit has been both economically damaging while quite dramatically increasing immigration – the exact opposite of what was promised! To make matters worse, all parties continue to promote policies that will make the UK a poorer and even more divided country.
New reports – same story – Brexit is failing
In late 2024, I wrote two articles, published on Sussex Bylines, setting out the economic cost of Brexit at that time and forecasting that without fixing Brexit it would get worse – and it has. For the second year in a row the budget delivered tax rises, £26 billion this time, for an increasingly bloated welfare state, but failed to deliver any measures to attract investment and improve productivity and GDP growth.
On the 13 November 2025 the Office for National Statistics reported that UK GDP growth had slowed once again to 0.1% in the July to September period. At the same time, a new paper “The Economic Impact of Brexit” by the National Bureau of Economic Research estimated that Brexit had reduced UK GDP by 6% to 8% by 2025. The report is comprehensive, and clearly articulates what we all witness every day – that Brexit has increased uncertainty, lowered investment and trade, reduced productivity, wasted resources and Government funds and has resulted in tax increases for all.
This analysis is consistent with the earlier analysis by Goldman Sachs and the Tony Blair Institute, showing Brexit reducing GDP by 5 to 5.5% by 2023/24, referenced in the papers last year, and shows that the impact of Brexit is both ongoing and getting worse. However, the public have no idea that these small percentages (much less than a Black Friday discount), result in billions of losses in GDP and taxes to fund public services.
The cost of Brexit in pounds not percentages
In the articles last year, using national data sources, we showed that after the 2016 Brexit vote, actual UK GDP only increased from £2,167 Billion(bn) in 2017 to £2,274 bn in 2023.
Applying the Goldman Sachs and Tony Blair Institute analysis, we showed that:
- In the year 2023 alone, without Brexit, UK GDP would have been £2,388bn, meaning that with actual UK GDP of £2,274bn, the annual shortfall due to Brexit, in lost UK GDP, was £114 bn and the Government missed out on £40bn in taxes, and
- Between the Brexit vote in 2016 and 2023, Brexit cost the UK in total c.£434bn in lost GDP and £150bn in lost taxes.
Further, we forecast that Brexit would:
- Cost the UK £1,098bn in lost GDP and £385bn in lost taxes between 2024 to 2029.
- By 2029 result in a 9.4% GDP loss, equivalent to £236bn in GDP and £83bn in taxes.
The National Bureau of Economic Research report backs that up, and implies that in 2025:
- UK GDP is £140bn to £188bn lower than it would have been, consistent with the modelling last year and
- The tax loss is between £50bn and £65bn
With those levels of tax generated by GDP, no tax rises would be forthcoming, and the Chancellor could have removed the two child cap, reduced tax rates and started to pay down debt. Instead, every day, inflation rates and interest rates remain higher than they do across European countries, and our exchange rate remains lower, making imports more expensive and exports cheaper – yet the red tape of Brexit has reduced those exports too.
With such stark self-inflicted ongoing losses being incurred, it is not surprising that significant investment confidence has and is being eroded in the UK. This has been exacerbated by proposed budget policies that continually seem to attack the creation of wealth. In simple terms, since Brexit, the policy of successive Governments appears to be for wealthy international and UK investors – we want your money, but we don’t want you!
This approach has to change, otherwise we are quickly heading towards the outcome from “The Parable of 10 Men in a Pub” in which we all lose.
Polls show we all know Brexit has failed; Britain remains divided. We deserve better from our political class. The party that brings this country together; openly saying “Brexit is a mistake”, fixing it to improve the economy through closer ties with the EU and restoring investor confidence will be acting in the National interest and will win the next election.
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