The Cost of Brexit

In the recent past, there has been a controversy over the UK’s decision to leave the European Union. Brexit Supporters argue that the decision will significantly impact the British economy. Besides the opponents, on the other hand, argue that it will result in associated costs on the British economy, with the majority concerned about the impacts on the GDP and the GNP. Therefore, this paper highlights various benefits and costs and presents reasons why the majority of people in British feel that it was in the nation’s best interest to exit the EU while outlining the uncertainty on the precise nature of the post-Brexit trade deal between Britain and the EU.

Benefits of EU Membership to the British Economy

The British economy significantly benefited from the EU membership. According to Majbour (2022), EU membership in the British economy led to increased trade. Since the EU is the largest trading partner of the UK, being a member of the single market allowed for the free movement of goods, services, capital, and people between the UK and the other member states. As a result, trade and investment increased, thus boosting economic growth.

Further, EU membership in the British economy reduced goods and services prices. As Van Reenen (2019) highlighted in his research, the removal of various tariffs and challenges in the distribution of goods and services to different member states led to reduced prices for consumers in the UK. For instance, the single market created a competitive environment, leading to businesses having lower their prices to compete successfully and efficiently.

Costs of EU Membership to the British Economy

Other than the evidenced benefits, EU membership was associated with various costs. Hakan (2019) argues that the EU membership to the British economy influenced the net contributions to the EU budget. As the net contributor to the EU budget, the UK has been forced to pay more than it receives in funding. That serves as a source of resentment to the British taxpayers. Moreover, the EU membership in the British economy led to a loss of sovereignty. According to Hakan, C. (2019), EU membership eroded the UK’s sovereignty since the UK was forced to cede some control over its laws and regulations to the EU.

Why Do the Majority of People Think it was in the Best Interest of The Nation To Exit The EU?

The UK’s decision to leave the EU led to a positive influence on many people. That is because most people in Britain voted to leave the EU, revealing different instances and reasons. As argued by Martin et al. (2019), many people in the UK were dissatisfied with how the EU was operating. They felt that the EU was too bureaucratic, undemocratic, and expensive. Besides, the British community desired to control immigration since it had raised various forms of controversy. The research findings show that many people who voted to leave the EU felt they wanted to have more control over immigration from other EU countries.

Uncertainty over Trade and Its Impact on Economic Growth

The ambiguity surrounding the specifics of the post-Brexit trade agreement between Britain and the EU has negatively impacted the UK’s economic development. This is because companies have been hesitant to spend money and hire new employees because it is unclear how the two sides would conduct trade in the future.

However, for Brexit to be a net positive for the British economy in the long run, a number of things have to happen. For instance, the UK and the EU must strike a good trade deal. Embracing a good trade deal is necessary because it will ensure that businesses in the UK can contribute to trade with the EU without facing significant tariffs or other barriers. Further, the UK will need to invest in its infrastructure and skill base to facilitate the UK’s economic competition in the global economy. Whether Brexit will ultimately benefit or hurt the British economy remains to be seen. However, Brexit is a net plus for the UK economy if the UK can reach a strong trade agreement with the EU, make investments in its infrastructure and skill base, and foster an atmosphere that encourages corporate investment and expansion. In addition to those mentioned above, there are a number of additional factors that could affect how Brexit affects the British economy. These include the state of the world economy, other nations’ deeds, and the UK government’s choices.

References

Hakan, C. (2019). The cost of Brexit: Neo-functionalism strikes back. Romanian Journal of European Affairs, 19(1), 65-78.

Majbour, J. (2022). Brexit and its Effect on the EU in terms of the Economy. Qualitative Content Analysis.

Martin, J., Martinez, A., & Mejean, I. (2019). The cost of Brexit uncertainty: missing partners for French exporters. Notes IPP, (48).

Van Reenen, J. (2019). Brexit’s long-run effects on the UK economy. Brookings papers on economic activity, 367-383.