Ten years after Britain voted to leave the European Union, the economic consequences are crystallising not in grand macroeconomic forecasts but in the daily frustrations of a small Bristol-based start-up called Eskimo. The company, which makes high-fashion and energy-efficient electric radiators based on new academic technology, planned to send them across the Channel Tunnel and into Europe. Its boss, Phil Ward, says the product was timely, given Europe's green ambitions, and orders were flowing from its Birmingham factory. But by 2025, the share of his exports going to the EU had collapsed from 40% in 2020 to just 5%.
The post-Brexit trade deal agreed by Boris Johnson in December 2020 guaranteed zero tariffs on exports to the EU, but Ward says red tape and paperwork not related to tariffs were enough to create delays, costs and the expectation of hassle for prospective customers. Eskimo managed to export some goods to agents in France but stopped selling directly to European consumers entirely. A planned expansion to Germany floundered. When Eskimo attempted to export towel rails to Australia and New Zealand, it discovered that both countries abide by international safety standards heavily influenced by the EU's CE mark — a problem because one theoretical benefit of Brexit was that UK regulators could take a more pro-innovation approach and diverge from EU rules.
“Brexit red tape caused UK firm Eskimo to slash EU exports from 40% to 5%.”
Eskimo's experience reflects a broader trend. The UK Trade Policy Observatory at Sussex University calculated a rapid 26% reduction in the different types of UK exports by 2023. A new study from Aston University Business School, using five years of detailed trade data, concludes a loss of 53.8% of export varieties and 31.5% for imports — meaning the number of products sent to different EU countries has fallen sharply.
A decade ago, many economists argued the UK would sustain longer-term economic damage by leaving the EU, and many believe that damage has come to pass. But making that call requires comparing what did happen with what might have happened without Brexit — a statistical judgement complicated by the pandemic that struck in spring 2020, the war in Ukraine that began two years later and, more recently, the energy price shock sparked by the conflict in Iran. Whether a Brexit-free UK would have kept up with the Silicon Valley tech boom remains an open question.