Five key impacts of Brexit five years on

On January 31, 2020, the United Kingdom officially left the European Union, and five years have passed since then. On this day, the UK ended its 47-year political connection with the EU, but in order to maintain smooth trade, the UK remained in the EU single market and customs union for the following 11 months. Northern Ireland adopted separate arrangements. Brexit has caused huge divisions on political and social levels, and the debate about its impact has continued for many years, dominating political discussions.

Five years after the UK officially left the EU, BBC Verify analyzed the impact of Brexit in five key areas. First, in terms of trade, economists and analysts generally agree that leaving the EU single market and customs union on January 1, 2021, had a negative impact on the UK's trade in goods. Although the UK reached a free trade agreement with the EU, avoiding tariffs on the import and export of goods, the negative impact mainly came from so-called "non-tariff barriers," that is, new, time-consuming, and sometimes complex documents that companies must fill out when importing and exporting goods to and from the EU.

There are some disagreements about the specific extent of the negative impact of Brexit. Some studies suggest that the UK's goods exports are 30% lower than they would have been without leaving the single market and customs union, while other studies suggest the decrease is only 6%. Because the results largely depend on how researchers measure the "counterfactual," that is, what would have happened to exports if the UK had remained in the EU, we cannot determine the exact figure. But what is certain is that small businesses in the UK seem to have been more negatively affected than large businesses, as they find it more difficult to cope with the new cross-border bureaucratic procedures after Brexit.

In addition, since 2021, the UK's service exports (such as advertising and management consulting) have performed surprisingly well. However, the government's independent official forecasting body, the Office for Budget Responsibility (OBR), still believes that in the long run, Brexit will reduce the volume of imports and exports of goods and services by 15%. The OBR also believes that, relative to other scenarios, the decline in trade will reduce the long-term size of the UK economy by about 4%, equivalent to about £100 billion today. Although the OBR has stated that it may revise these assumptions based on new evidence and research, there is currently no evidence to suggest that the impact will turn into a positive one.

After Brexit, the UK can reach its own trade agreements with other countries. The UK has reached new trade agreements with Australia and New Zealand and is seeking new agreements with the United States and India. However, the government's own official impact assessment suggests that the impact of these agreements on the economy is small compared to the negative impact of UK-EU trade. Nevertheless, some economists believe that the UK may gain long-term economic benefits in areas such as artificial intelligence without having to comply with EU laws and regulations.

Second, in terms of immigration, immigration was a key theme in the 2016 referendum, with the core issue being the free movement within the EU, that is, UK and EU citizens could freely travel, study, work, and live in each other's countries. Since the referendum, EU immigration and EU net migration (immigration minus emigration) have fallen sharply, accelerating after 2020 due to the end of free movement. However, since 2020, net migration from the rest of the world has increased significantly. In January 2021, the post-Brexit immigration system came into effect, under which both EU and non-EU citizens need work visas to work in the UK (except for Irish citizens).

Since 2020, the two main drivers of increased non-EU immigration have been work visas (especially in the health and care sectors) and international students and their families. UK universities have begun to recruit more non-EU overseas students to alleviate their deteriorating financial situation. The Boris Johnson government's decision to allow overseas students to stay in the UK to work after graduation also made the UK more attractive to international students. Subsequent Conservative governments have reduced the rights of those with work and student visas to bring family members, and the Labour Party has also retained these restrictions.

Third, in terms of travel, Brexit ended free movement, which also affected tourists and business travelers. UK passport holders can no longer use the "EU/EEA/Switzerland" lane at EU border checkpoints. People can still visit the EU as tourists for 90 days within any 180-day period without a visa, provided that their passport is valid for at least three months upon their return. This applies to UK citizens traveling to the EU and EU citizens traveling to the UK. However, bigger changes in travel are on the horizon. The EU plans to launch a new electronic entry and exit system (EES) in 2025, an automated IT system for registering travelers from non-EU countries.

The system will register travelers' names, types of travel documents, biometric data (fingerprints and facial images), and dates and locations of entry and exit. It will replace manual passport stamping. Its impact is not yet clear, but some in the tourism industry fear that it may increase border queuing times for people leaving the UK. The EES was originally scheduled to launch in November 2024 but has been postponed to 2025, with no new implementation date yet determined. Six months after the launch of the EES, the EU says it will launch a new European Travel Information and Authorization System (ETIAS). UK citizens must obtain ETIAS authorization to travel to 30 European countries. The ETIAS authorization costs €7 (£5.90) and is valid for a maximum of three years or until the passport expires, whichever comes first.

Meanwhile, the UK will launch an equivalent of the ETIAS system for EU citizens (except Irish citizens) from April 2, 2025. The UK's permit – called Electronic Travel Authorization (ETA) – will cost £16. UK holidaymakers must obtain ETIAS authorization to travel to the EU. The fourth and fifth points are law and funding, which will not be discussed here.

Finally, the impact of Brexit is broad and far-reaching, and we have only discussed a portion of it here, including areas such as territorial fishing rights, agriculture, and defense. As the Labour Party seeks to readjust relations with the EU, Brexit will be a topic of ongoing debate and analysis for many years to come.