Did Brexit really harm economic growth?

This weekend, there were more claims that Brexit has led to slow economic growth in the UK, repeating the views of senior Labour politicians seeking re-entry into the European Union.

An article in the Sunday Times said it is ‘irritating’ when people say Brexit’s effect on the economy ‘cannot have been that bad because, since 2016, the UK’s economic growth has been in line with the big European economies’.

It continued: ‘Such claims ignore the history, which is that before the Leave vote, achieving the growth rates of the big European economies would have been regarded as a failure’, and that ‘the loss of growth is all the clearer in the figures for GDP per head post-2016, with the UK comfortably outgrown by Italy, Spain, France and the eurozone’.

But if you follow that logic, then you could say that Britain’s best period growth was before it joined the European Economic Community (EEC) in 1973, before dropping to an annual average of 1.8 per cent over the next two decades, and then decreasing to 1.7 per cent between the Maastricht treaty in 1993 and 2016.

How much did EEC or EU membership affect these growth rates? Sure, France, West Germany and Italy were members of the EEC from 1957 and all three economies experienced post-war booms – the Trente Glorieuses, Wirtschaftswunder and Italian economic miracle – but they also experienced economic crises in the 1970s. Italian membership of the Common Market did not aid its economic turmoil in the 1990s and 2000s, and perhaps even hindered its recovery.

What’s clear is that using this metric to argue for a correlation between closeness to the European market and economic growth is not a strong enough point.

Last month, I wrote in more detail about how, when comparing the data from the past decade, one thing becomes clear: it is hard to disentangle the economic effects of Brexit from those of the Covid lockdowns and the Russia–Ukraine and US–Iran wars. There are too many external factors to take into account.