The cost of Brexit to the UK economy is already over £130bn. By comparison, the International Space Station cost £115bn. It is not rocket science to see that the long-term price of a no-deal Brexit will be three times higher than the coronavirus lockdown, says ParcelHero.
The economic cost of Brexit has already passed £130bn and is likely to top £200bn by the end of the year, according to a report from Bloomberg Economics. Constructing the International Space Station (ISS), the most ambitious collaborative international project ever, cost £115bn. With the price of Brexit continuing to rocket to astronomical levels, the international courier services expert ParcelHero fears it will be significantly higher than the cost of the coronavirus pandemic to the UK economy.
ParcelHero’s Head of Consumer Research, David Jinks MILT said that a Bloomberg Economics report found that, by January 2020, the British economy was 3% smaller than it would have been if the UK had not voted for Brexit and the relationship between the UK and the EU had been maintained. It said the economic cost to the UK was already £130bn by the beginning of 2020. Eight months on, it continues to soar.
The Government’s own figures confirm the widening gulf between the EU and the UK. While the Eurozone’s GDP contracted by -11.8% during the second quarter of the year, the UK’s GDP collapsed by -20%.
To add to the enormous loss of investment and long-term contracts, there is also the price of the Brexit preparations themselves to consider. These include last year’s disastrously mis-timed £100m ‘Get Ready for Brexit’ campaign, which made even this year’s woeful ‘Stay Alert’ Covid awareness marketing seem successful.
Then consider the cost of last year’s wasted stockpiled food and medicines and the chaotic Operation Brock, which closed one side of the M20 for months, creating huge tailbacks. This year, vast sums are being spent on new border equipment, recruiting and training 50,000 Customs Officials and the new electronic Smart Freight System.
This may be only the beginning. If the Government continues with its belligerent negotiation tactics, such as this week’s Internal Market Bill, which threatened to overthrow international agreements Britain had already signed in good faith, then we will undoubtedly be looking at a no-deal Brexit in January. ParcelHero’s own research has revealed a no-deal Brexit will create £11bn of new border tariffs and will cost the average UK SME £163,000 in increased costs and duties.
We fully concur with the warning given last month by Thomas Sampson, Associate Professor at the London School of Economics, who said, “When measured in terms of their impact on the present value of UK GDP, the Brexit shock is forecast to be two to three times greater than the impact of COVID-19.”
The most pessimistic forecast for the cost of the coronavirus comes from the Office of Budget Responsibility (OBR). According to its calculations, the cost of Covid will be £192.6bn. Professor Sampson’s warning highlights the ongoing cost of Brexit to 2035 will far exceed the short-term Covid hit.
People will have their own opinion whether Brexit or the International Space Station represents the best way to invest in the future. It is interesting, however, that £200bn by the end of this year is more than the value of the entire British food and grocery market. We could all have free groceries for a year for the cost of Brexit.