By Marcus Coetzee, May 2026

The UK decided to leave the European Union in 2016, following a referendum in which 52% voted to leave and 48% voted to remain.

This vote was the culmination of years of private and public debate about the pros and cons of EU membership versus carving out an independent future.

Now, ten years later, the Labour government and others are discussing whether the UK should try to rejoin the EU in some form. They claim that Brexit was a net economic loss, which is probably true, and that rejoining would be worth the costs.

But from my perspective, Brexit never really happened. The UK simply left its biggest marketplace and made it more difficult to travel to Europe. The Brexit experiment was never properly conducted, which makes it impossible to evaluate properly.

I write this essay without tribal allegiance. I was neither a Remainer nor a Brexiteer, having lived in Cape Town at the time and witnessed the campaigns only from afar. I have chosen to focus on the economic aspects of Brexit rather than the full set of issues that guided people’s votes.

My sense is that Brexit has been an economic failure, primarily due to the government’s negligence in managing the risks and exploiting the opportunities that Brexit presented.

1. The economic promises leading up to Brexit

I am legitimately shocked to discover that there was no proper economic or industrial manifesto or strategy leading up to Brexit. This is unlike anything we typically see ahead of a general or local election.

The Remain campaign had a clearly defined policy position: stay in the EU under existing terms. The Vote Leave campaign made numerous claims and promises during its ten-week campaign that did not later materialise.

The economic claims focused on what would be freed up or removed by Brexit (EU budget contributions, regulations, immigration rules) rather than what would be built or deployed instead. I am reminded of teenagers lobbying to leave the constraints of their parents’ house without thinking about how they will support themselves. They claimed the UK could have the best of both worlds: access to the EU market without the costs, and the freedom to negotiate new deals elsewhere.

Economists for Brexit, a group of eight economists led by Professor Patrick Minford of Cardiff University and formerly adviser to Margaret Thatcher, claimed the UK economy would be boosted by 4% outside the EU. The group also acknowledged that manufacturing would suffer under the new trade rules, but argued that the services sector would pick up the slack.

What I find most startling is that even the Vote Leave campaign seemed to acknowledge that Brexit would continue and accelerate the deindustrialisation of the UK, under the guise of economic liberation. This is a theme I explore thoroughly in my essay on the deindustrialisation of Scotland, and by implication, Britain.

2. Post-Brexit industrial and economic plans

Logically, one would assume that after the referendum there would be a scramble to develop economic and industrial strategies to exploit the new opportunities. There was not.

The closest thing was a 2017 White Paper produced under Theresa May, which outlined a ten-year plan to boost national productivity and earning power. It laid out five foundational pillars and four Grand Challenges to modernise the UK economy.

The five pillars were Ideas, People, Infrastructure, Business Environment and Places. The Grand Challenges were Artificial Intelligence and Data, Clean Growth, Ageing Society and Future of Mobility. This was a broad framework document that happened to coincide with Brexit rather than focusing explicitly on how to manage Brexit risks and capitalise on the emerging opportunities.

The government under Boris Johnson scrapped this framework in 2021 and replaced it with a Plan for Growth, focused on levelling up, net zero and Global Britain. This document also made no serious attempt to address Brexit risks or opportunities.

3. The lack of economic planning for Brexit

I continue to be surprised, as I research and write this essay, by the sheer absence of economic strategies and plans for making the most of Brexit.

The key leaders of the Leave campaign (Johnson, Gove and Farage) were politicians focused on winning the referendum, not economists planning for what would come afterwards.

The economic thinkers behind Brexit were broadly continuing with the same ideas that had driven the deindustrialisation of Britain, which Thatcher had hastened. They envisioned a modern services economy centred on the South of England.

Subsequent governments under May, Johnson, Truss and Sunak were consumed by other crises. The Covid pandemic, the fallout from Brexit itself, and various political emergencies left little room for strategic economic thinking. They inherited existing frameworks and largely continued them.

4. The economy after Brexit

Brexit returned theoretical freedom to the UK in trade policy, regulatory policy, industrial strategy and public procurement.

The cost of recovering that freedom was real and immediate. Britain lost frictionless market access, supply chains were disrupted, inward investment fell, and exporters faced significant new administrative burdens. The pound fell by roughly 15% in the two years following the referendum, reflecting investor uncertainty about what Brexit would actually mean.

The economic implementation of Brexit seems almost criminal in its negligence. The UK government lacked the ideological coherence, institutional capacity and political bandwidth to deploy the tools it had just paid a significant price to recover. A government that leads a country through a massive structural disruption and then fails to implement any of the policies that would have justified that disruption has genuinely failed in its basic duty.

The people who paid the price were the exporters, the manufacturers, the fishing communities and the post-industrial towns who voted for Brexit expecting something to change. Almost nothing changed for them, except that their market access got harder.

5. Evaluating Brexit against six critical economic areas

Let me focus on six areas which I believe would have been critical to gaining the full economic benefit from Brexit. These areas are not mutually exclusive and are somewhat interrelated. I have been concise, as this is a short essay.

Areas 1 and 2 (trade relationships and people and skills) were direct economic consequences of Brexit. Areas 3 through 6 (capital and investment, industrial capacity, business environment and self-sufficiency) represent a failure to exploit the opportunities Brexit presented. These latter failures continue an established ideological trend present since at least the 1970s. They are the consequences of leaving the EU and then doing nothing meaningful with the recovered freedom.

5.1. Impact on trade relationships

Leaving the EU single market created immediate and measurable trade friction. It has permanently increased the cost of doing business with Britain’s largest trading partner.

The EU-UK Trade and Cooperation Agreement, signed in 2021, is the UK’s largest trade agreement, covering over £700 billion of trade. It manages a controlled reduction of economic integration rather than any expansion. It has introduced significant non-tariff barriers on UK exports to the EU.

The UK has rolled over several existing trade agreements, such as those with Japan and Norway, continuing the same terms it had as an EU member. New agreements have been signed with India and the Gulf states, though the economic gains are modest.

The UK government remains averse to using the full toolkit available to it: tariffs, subsidies, anti-dumping duties, state banks, carbon border adjustments, domestic content requirements in public procurement and strategic use of technical standards. Other countries make active use of these instruments within WTO rules. The UK does not, to anything like the same extent.

The consensus among economists is that the net effect of Brexit on trade has been significantly negative. The economic losses outweigh the gains from new agreements.

5.2. Impact on people and skills

Ending free movement achieved its stated political objective of reducing EU immigration. The idea was that this would give UK businesses an opportunity to recruit and train local workers instead.

In practice, it created immediate and serious skills shortages in healthcare, agriculture, food processing, construction and hospitality. The EU workers who typically filled these roles could no longer move freely to the UK. This inflow was largely replaced by irregular immigration from outside Europe, which tended to involve less skilled workers and greater reliance on benefits. I believe these were largely unrelated developments rather than a direct consequence of Brexit.

The highly skilled workers Britain most needed to retain and attract were largely unaffected by EU free movement rules in the first place. They came primarily from the United States, Australia, India and South Africa, under a separate visa system that Brexit did not meaningfully change.

From an economic perspective, Brexit deprived the UK of a valuable and productive labour pool. The increase in irregular immigration would most likely have occurred regardless.

5.3. Impact on capital and investment

Brexit freed Britain from EU state aid rules, which had been considerably more restrictive than WTO subsidy rules. This created a real opportunity for the UK government to deploy subsidies, discounted loans and other industrial support at a scale previously constrained by Brussels.

This opportunity was almost entirely ignored. Not just because of a lack of institutional capacity, but because it runs against deeply held doctrine. The UK government has long preferred a hands-off, laissez-faire approach, expecting industries to stand on their own rather than receiving state support. This philosophy made some sense when Britain sat at the centre of a global empire. It makes far less sense when competing against countries that actively invest in, nurture and protect their key industries.

Research shows that in 2019 the UK spent just 0.51% of GDP on state aid for businesses, compared to France at 0.85% and Germany at 1.54%. These figures predate Brexit, which means the UK was already choosing not to use the freedom available to it, even before that freedom was expanded.

Foreign direct investment fell significantly following the referendum. According to the National Institute of Economic and Social Research, FDI into the UK dropped by 37% between 2016 and 2022, as multinational companies relocated operations to the EU to preserve single market access.

5.4. Impact on industrial and productive capacity

The recovered freedom to deploy a wide range of industrial support measures was never converted into active policy. The theoretical tools for industrial revival sat unused while deindustrialisation continued. This is a long-term trend I explore in detail in my essay on the deindustrialisation of Scotland.

There were no serious, hands-on policies to nurture key sectors, replace imports or use the newly available subsidies and trade protections. The communities in the industrial heartlands of Britain who voted for Brexit expecting revival are broadly no better off than before.

5.5. Impact on the business environment and regulation

The promised bonfire of EU red tape never materialised at any meaningful scale.

This is largely because so much EU regulation had already been written into UK law before Brexit. In much the same way the UK has absorbed the ECHR framework, it absorbed the acquis. When Britain left the EU, somewhere between 4,000 and 6,900 pieces of EU legislation were copied directly into UK law through the European Union Withdrawal Act 2018. This body of retained EU law covers virtually every aspect of business operation, including employment law, environmental standards, product safety, chemical regulations, data protection and financial services.

These rules are still binding on British businesses. In some cases the burden has actually increased, as businesses must now comply with both the UK and EU versions of the same framework simultaneously. Any business exporting to the EU also faces significant additional bureaucracy that did not exist before.

Brexit therefore increased rather than reduced the regulatory burden on British businesses.

5.6. Impact on resilience and self-sufficiency

One of my longstanding interests is how the UK might build an economy resilient enough to withstand global turmoil. History suggests this is inevitable. The UK’s vulnerability has been illustrated recently by the Ukraine war, the Covid pandemic and instability in the Middle East. It has forgotten the lessons in self-sufficiency it learned during two World Wars, when supply chains were severed, and during the 1970s energy crisis. I have also written separately about the vulnerability of Britain’s undersea infrastructure.

Brexit offered a genuine opportunity to rebuild domestic productive capacity and supply chain resilience. I would have expected meaningful progress in at least the following areas, listed in rough order of strategic importance: energy independence (which I examined in my essay on UK energy policy), food security, pharmaceuticals and medical supplies, semiconductors and ICT infrastructure, steel and metals, and fertilisers and agricultural chemicals.

Serious strategic vulnerabilities have developed across every one of these areas since approximately the 1970s, driven by the same laissez-faire ideology I have highlighted throughout my essays. Brexit did nothing to reverse that trend.

6. Conclusion

Brexit delivered one economic outcome cleanly. It enabled the UK to exit the EU single market, with all the costs and constraints that entailed.

The economic impact was immediate. The currency fell. Exporters faced new bureaucracy and lost preferential access to EU customers. The pool of available EU workers shrank as free movement ended. Businesses relocated to the EU. Foreign direct investment dropped sharply. The consensus among economists is that the UK economy has suffered as a result of Brexit. I tend to agree.

But this is not an argument about whether Brexit was right or wrong in principle. Remainers will argue that this proves Brexit was a failure and a bad idea. Brexiteers will argue that it was a success or simply needs more time. I am arguing for neither position. I find the entrenchment of both sides genuinely frustrating.

From an economic perspective, Brexit was one of the most spectacular planning and implementation failures in modern British political history. It represented a failure of strategic and policy planners to mitigate risk and take full advantage of the economic freedom it provided. The UK absorbed the predictable economic hit of leaving and then continued as normal, with the same economic policies and ideologies that had guided it for the previous fifty years.

Taking advantage of Brexit would have required policymakers to be far more hands-on and economically aggressive in growing and protecting key industries. This is the approach taken as a matter of course by China, the United States, South Korea, Germany, France, Japan and Singapore. The UK is genuinely unusual among serious economies in its ideological commitment to non-intervention.

This point applies equally to Scottish independence. The question of constitutional structure is less important than the question of economic doctrine. Industrial revival is not automatic. Economic growth requires a government willing to use the full set of tools available to it, within an intensely competitive and turbulent global environment.

I am not arguing for or against rejoining the EU. I am simply pointing out that Britain never actually found out whether Brexit could work, because it never tried to make it work. The Brexit experiment was never conducted.