Delay to post-Brexit deal costs UK £100m a week, analysis shows
Britain is losing up to £100m every week due to a lack of a historic deal with the European Union, new research shows; This is leading to calls for Sir Keir Starmer to urgently break the economic ‘doom cycle’ of Brexit.
Months after the Prime Minister praised the major ‘renewal’ process with the EU, which he announced with great fanfare alongside European Commission chief Ursula von der Leyen, a key strand of food and drink exports is yet to be finalised.
Sanitary and phytosanitary (SPS) agreement It would align Britain’s standards with those of the EU and eliminate the need for most certification and checks on animals and plants moving between the UK and the bloc.
The deal, which is predicted to cut through hugely expensive red tape and vastly increase the volume of imports and exports to and from the EU, is worth £14 million a day to the UK economy, according to new research from the House of Commons Library, prompting calls for ministers to speed up the process.
But the government hit back at opposition politicians, calling it “disgraceful” that they did not support Labour’s push for closer ties with the bloc.
The new analysis looked at the planned UK-EU food and drink deal and concluded its value could be “up to £14 million per day” once the UK “economy fully adapts to the new system”.
This figure is subject to change throughout the year and may increase or decrease, but “may also vary depending on things like weekends, public holidays, a busier time of year, etc.”
Al Pinkerton, the Liberal Democrats’ Europe spokesman, who commissioned the analysis, said: “The government went to great lengths to showcase its shiny new plans to sign an SPS deal with the EU in May. Six months later there is nothing left to show for it and the British public are millions of pounds worse off in a day because of their inaction.”
He added: “Ministers must end the indecision, tackle this economic crisis and deliver the SPS deal they promised – finally cutting out the loads of red tape that are holding British jobs back.”
But a government spokesman hit back: “We signed a landmark agreement with the EU in May, resetting our relationship to serve the people.”
He added: “It’s a shame the Liberal Democrats won’t support this progress or support the government while negotiations continue.”
Sources within the government said talks on the agreement began after the EU’s 27 member states agreed on negotiating powers. They added that the deal would support British jobs and businesses and reduce prices.
Brexit cost UK businesses £37 billion in the 12 months to September when it emerged earlier this year; These figures led ministers to vow to “tear down” barriers to trade with the EU.
The figures also showed that total trade with the EU was 5 per cent lower than before Britain left the bloc.
An estimated 16,400 businesses, accounting for around 14 per cent of UK exporters, have stopped exporting to the EU due to Brexit trade rules, while others have never started, according to research by the LSE Center for Economic Performance.
Part of this is likely due to the increased complexity of new export regulations. Supermarket giant Marks & Spencer’s said it had to rent a warehouse just to store the paperwork.
Negotiations between the UK and the EU on the SPS agreement began in late November. Ministers believe the deal with the UK’s largest agri-food trading partner could increase the volume of exports of the UK’s major agricultural products to the EU by 16 per cent and imports from the EU by 8 per cent.
The government estimates that reducing bureaucracy and other costs overall could save businesses up to £1 million a month. Currently, businesses are subject to expensive certifications and checks to move food across the border, including a requirement for an Export Health Certificate; this works out to up to £200 per shipment.
Naomi Smith, chief executive of pro-EU campaign group Best for Britain, which has been calling for an SPS deal since May 2023, said the economic impact of Brexit was affecting people “every day”.
“The cost of living in the UK is compounded by slow economic growth and low productivity, our weak trading relationship with the EU and negotiators on both sides working faster to break this cycle of disaster,” he added.
A government spokesman said: “We signed a landmark agreement with the EU in May, resetting our relationship publicly. It is a shame that the Liberal Democrats will not support this progress or support the government while negotiations continue.”
