By stewartb
New research to determine the costs/benefits to UK nations and regions of Brexit is
featured in the latest newsletter of UK in a Changing Europe, a think tank based at King’s
College London and funded by UK Research and Innovation.
The study finds that: ‘Brexit has contributed to the equalisation of regional inequality
– not by levelling up poorer regions but hitting richer regions more severely. This
form of levelling up is rather destructive since it implies levelling up only in relative
terms, all while (sic) making the whole of the UK poorer.’
(A summary of research findings can be found here: https://ukandeu.ac.uk/levelling-up-by-
levelling-down-the-economic-and-political-costs-of-
brexit/?mc_cid=d20add413a&mc_eid=724ea8d3d6 . The full paper, including details of the
quantitative economic analysis and modelling, is here : Alabrese et al (2024) Levelling up
by levelling down: The economic and political costs of Brexit.
( https://brexitcost.org/brexitcost.pdf .)
- Impact on UK nations and regions
The key findings are:
Lower growth: ‘the cost of Brexit – in the form of lower trend growth – is large and near
universal across all regions and constituent countries of the United Kingdom’ (my
emphasis). - Losses: ‘the output losses due to Brexit range from 5 to 10 percentage points of GDP,
relative to a large set of synthetic control estimates’. - Effects not uniform: ’there is notable cross-country and regional heterogeneity in the
economic costs of Brexit’- average annual output loss for the entire UK during the post-Brexit period is around 5
percentage points - for England, the output loss is c. 4.5 percentage points
- for Scotland, the output loss is 5.9 percentage points
- for Northern Ireland it is only 1.4 percentage points
- average annual output loss for the entire UK during the post-Brexit period is around 5
- Ongoing negative impact: ’the output loss in 2022 became more pronounced’ most
especially for Scotland (see Figure 1 below for details) - Favoured status: ’Northern Ireland has to date not been adversely affected by Brexit’.
The authors note: ‘Northern Ireland – unlike the rest of the UK – effectively continues to be
part of the EU customs union, as stipulated in the EU-UK Trade and Cooperation
Agreement’.
The graph below (Figure 1) reproduced from the research paper sums up the impact of Brexit on national and regional economies. The red line is the growth trend the authors estimate would have been achieved without Brexit (i.e. the counterfactual), based on how comparable economies internationally have performed. As reported in the caption for the graph, the economic cost (the output loss) of Brexit by 2022 for each UK nation was:
- England: minus 6.5 percentage points (difference between actual and estimated
- counterfactual)
- Wales: minus 8.3 percentage points
- Scotland: minus 8.7 percentage points
- NI: close to no impact.
A majority in England and Wales – the former majority being the crucial one in determining the EU referendum outcome and its subsequent impact – voted for Brexit. Remain voting NI has been protected from much of the adverse economic consequences of England and Wales’ Brexit decision. Remain voting Scotland – the nation also represented by elected politicians who were for the most part in favour of continuing EU single market and customs union participation after Brexit (i.e. they were against the Westminster-imposed ‘hard Brexit’) – has according to this analysis been the most negatively impacted of all the UK nations. This fact is especially hard to stomach! Better together again?
Impact on local areas
The research also highlights heterogeneity in terms of the economic cost of Brexit at a
local level. It concludes:
- Across the UK: ‘the vast majority of local authorities – around 70% – have experienced
some cost of Brexit’ - ‘Only about 30% of districts appear to have outperformed their respective synthetic
control.’ - Scotland worst hit: ‘The share of areas with output losses is notably higher in
Scotland (93%), London (85%), and the South West (83%) – while the region with the
highest share of areas with output gains is Northern Ireland (93%).’
Research approach
The research paper sets out at length the methods of analysis and modelling used. In
short, to assess the national/regional economic costs of Brexit the authors construct what
they refer to as a ‘synthetic counterfactual’ for areas of the UK. They construct their
counterfactual ‘region X without Brexit’ using a weighted combination of regions in other
countries whose trends of GDP growth and other variables tracked the UK area in
question in the period of time prior to Brexit. The aim is to gauge how GDP would have
evolved had Brexit not occurred.
The authors also go to some length to justify the discounting of differential impacts of
post-Brexit factors such as the pandemic, stating: ‘We find that measures of post-2016
policy changes and COVID-19 deaths (as a proxy for relevant shocks to the UK economy)
also do not explain the output losses. These results are to be expected if our synthetic
control is robust. The lack of significant explanatory power from both pre-2016 Brexit
correlates and post-2016 policy changes and pandemic shock supports the validity of our
synthetic control model in accurately capturing the output gap induced by Brexit.’
The research was conducted by Eleonora Alabrese (University of Bath), Jacob Edenhofer
(University of Oxford), Thiemo Fetzer (University of Warwick and University of Bonn), and
Shizhuo Wang (New York University).
End note
Any discussion of national and regional economic disparities within the UK, whether
associated with Brexit or indeed any other area of Westminster-determined or influenced
economic policy should be placed in the context described below, all the while recalling
that government of the UK is overwhelmingly based on electoral majorities determined in
England:
‘It is broadly acknowledged the UK has the widest regional inequalities among the
advanced industrial economies (McCann, 2016). These regional inequalities are not
new. Indeed, they date from at least the mid-nineteenth century, when it became clear
that a growing gap was emerging between London (and the South-East) the UK’s
northern/midlands regions, and also Wales and Scotland (Martin,1988). The North-South
divide continued throughout the whole twentieth century.’
Adding: ‘The persistence of the North-South divide has, in more recent years, become
more prominent in the public eye. Political commentators and academics have begun to
refer to places that have been ‘left behind’ (Pike et al., 2022) and/or ‘lagging regions’ in
terms of their socio-economic outcomes. Some argue that this has given rise to a
‘geography of discontent’ (McCann, 2020), which was a significant factor behind the
Brexit vote ..’
Source: Fai, F. M., & Tomlinson, P. R. (2023). Levelling up or down? Addressing regional
inequalities in the UK. Contemporary Social Science, 18(3–4), 285–297. https://doi.org/
10.1080/21582041.2023.2282161
And more: ‘When compared with other nations internationally, a recent Institute of Fiscal
Studies study ranked the UK as the country with the greatest regional inequality of
the 27 countries it examined.’
Source: House of Lords Library (October 6, 2021) Inequalities of region and place.
Research Briefing (https://lordslibrary.parliament.uk/research-briefings/lln-2021-0027/ )
It’s an odd ‘competence’ of Westminster, with its England-derived electoral majorities, to
effect a reduction in such marked, long lasting economic inequalities by ‘levelling down‘
as the UK becomes poorer overall due to Brexit!
And is it not especially unacceptable that the economy – and by extension, levels of
prosperity and quality of public services – of a pro-remain constituent nation, one with
aspirations for independence, is now being harmed the most of any UK nation by Brexit,
the negative outcomes of which, arguably, are now being exploited by Unionist politicians
in opposition to the Scottish Government?
Talking-up Scotland 'Albatraz' 
Scotland did not vote for Brexit and is losing £Billions. EU contributions are still being paid and received. UK Gov whole accounts.
Brexit has just lost all the benefits. Shared Defence costs. Preferable EU contracts with other countries. CAP payments. Some still being received. Lost loans and grants for renewables and poverty. Nearest biggest markets. Preferable tariffs and health contracts reciprocal.
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I have yet to hear one opposition politician in Scotland acknowledge , concede or recognise the impact that Brexit has had on Scotland’s economy and which, as a UK policy, has resulted in serious shortages in the staffing levels in our NHS, Care Sector, Agriculture, Fishing sector and too the hospitality sector. (perhaps also other sectors as well).
Instead all that I have heard from those opposition politicians is a constant barrage of accusations and assertions cast upon the Scottish government as being those who are solely responsible for the above situation within these various sectors in Scotland.
The media have obliged the opposition parties and also colluded with them too in them, as a media, not consistently highlighting to the public in Scotland the negatives Scotland has suffered because of Brexit , which have included significant staff shortages in various important sectors within Scotland.
Which then, as factors, have partly contributed to having a negative impact upon our economy within Scotland.
Instead they , as a media, prefer to indulge those opposition politicians in them backing up all that the opposition parties assert in relation to the SNP being #BAD as the Scottish government.
Where they ,as a media, promote that all negatives in Scotland exist only as a result of the SNP’s supposed (but not) incompetence , mismanagement and also their. the SNP’s, supposed (but not) only focus and obsession being upon independence and not instead, as a devolved government, governing Scotland properly or well.
So therefore their judgement ,as the media , conveniently totally concurs with that of all of the opposition parties to the SNP, where we then hear and read about all of their (combined) lies that obscure the truth and the reality of what is really behind many of the existing negative situations happening within Scotland (and elsewhere in the UK too).
They , the media and opposition parties, publicise that the SNP have failed Scotland while collectively they deliberately choose to ignore Brexit as the significant factor that has negatively impacted Scotland post 2016.
(Indeed the Tories and some of the media used Covid as the main scapegoat to blame for all of the UK‘s economic woes that they say impeded progress being made by the Tory UK government and they also blamed the war in Ukraine as contributing too in preventing the UK government doing better. While mostly they totally ignored the proverbial ‘Elephant in the room’ as in Brexit’s negative impact on their UK).
Thus the Tory UK government were absolved from getting most of the blame for the state of the UK’s economy as that was reserved only, as blame, for the SNP as the Scottish government in Scotland apparently.
Of course all who currently are in the above noted sectors will absolutely know, recognise and acknowledge what is truly to blame for what is now them all seeing the many shortages of staff within their respective sectors in Scotland (and the UK).
They will be able to tell you exactly when these shortages of staff happened.
Also do you remember a time when the media and the opposition politicians never stopped talking or writing about Brexit ?
Then when the proverbial you know what ‘Hit the Fan’ suddenly ‘Omerta’ was applied and no one , be they from the media or pro UK opposition parties , were allowed to or seemed keen to constantly emphasise and also inform the public about the huge negatives connected to Brexit for all parts of the UK .
Labour is now, via Starmer, talking about supposedly ‘resetting relations with the EU’ but not by actually re-joining the EU, or re-joining the SM or CU and also Labour, via Starmer, are adamant that there will be no ‘Freedom of movement’ .
So one wonders if this so called “reset” is yet just another ‘window dressing’ exercise from Labour to try to appease those within the UK who still want to re-join the EU.
As if he , Starmer, does not want to concede (or rather negotiate and agree to with the EU) those very same things that the Tories also did not want to agree to with the EU.
Then what possible supposed meaningful “reset” can he, Starmer, hope to achieve that will then result in a positive economic impact for his UK (and more so for us in Scotland who did not even vote, via a majority, for Brexit yet are being forced to suffer the consequences of it all because we are still a part of their UK).
The UK is ducked but Labour, like the Tories, well they pretend it is a result of everything but Brexit so then they , Labour, like the Tories, pretend that the only way to fix the UK (economy) is by making some of the more vulnerable people in the UK continue to pay for the mistake that is Brexit.
As in Labour ,as the new UK government , now clearly imposing even more cuts and hardship upon those vulnerable groups within the UK who are less able to cope with suffering further cuts and hardship .
It then appears apparent that it is both a (poor) political decision for Labour to make and also the (worse) option they have chosen to take while deliberately ignoring the more effective options and decisions they could have taken and made to improve things within their UK. (reverse Brexit and let the wealthier within the UK contribute more to help ease the so called ‘”Financial black hole” that exists in the UK ).
So it seems that they, Labour, are determined to prove that, as the new UK government , they are and will be in the future very very very much unchanged as a new UK government from what we all witnessed and endured with the previous UK government , that was controlled by the Tory party.
#WheeshtForBrexit
#WheeshtForSeeingAnyRealChangeUnderTheLabourParty
However also, in both the past and it seems also now in the future, it will still be a case of:
Wheesht-For-Whose-Who-Are-Really-To-Blame-In-Scotland-For-The-Majority-Of-All-Of-Our-Woes (Clue: not as promoted as being the sole fault and sole responsibility of the SNP as the Scottish government.
They (all) so wish that was really the case but as it is not then they (all) must then continue to deploy their pro UK propaganda against the SNP (and also very very much them also being against the prospect of Scotland becoming independent and then perhaps, if democratically voted for by Scotland post our independence, us as an independent nation, then re-joining the EU ).
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I wish england would stop scrounging off its neighbours the english really are a bunch of lazy louts always looking for ways to take other peoples stuff
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When push comes to shove, Brexit, so called as we were all in the ‘UK’ before that remember, not ‘Britain’ or ‘GB’ those terms were not used in the run up to the Scottish (English controlled) independence referendum, was an undemocratic act thought up, managed and controlled by England, and to add insult to injury, after they’d removed Scotland from the EU by force, the EngGov kept ScotGov out of any ‘negotiations’ re a ‘deal’, basically it was a case of suck.it.up.Scotland!
Really Scotland, ScotGov should have insisted that the ‘leave’ result would only be valid if all four nations of the ‘UK’ voted accordingly, I know they would have been laughed at, but Brexit should never have been sanctioned when only two nations out of four voted to take us all four nations out of the EU, with disastrous consequences, and for those nations who voted to stay in the EU? Surely a huge democratic deficit?
SNP needs to make a huge song and dance out of this, England’s Brexit was a democracy denying referendum for Scotland imo.
Notice the BritNats have shut about it now, but it should be one of the many issues at the forefront of the election in Scotland in 2026. The SNP government need to not be scared of informing the people of Scotland about their policies by pointing out the contrast to those of England’s policies. Scotland is a country, not a region of England or the ‘UK’, though if the EngUK Labour party has anything to do with, that’s exactly what Scotland will become, a region, ‘northern UK’ (as referred to at the English controlled met office), Scotland no more.
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‘SNP needs to make a huge song and dance out of this’
Candidly, the SNP/Scottish Government needs now to ‘make a huge song and dance’ about something, about anything, about everything of import!
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