IT has seemed, in the run-up to and the aftermath of the UK’s hard Brexit, that many people have continued to fail entirely to grasp the scale of the detrimental impact on them.

These people should read The Big Brexit report, published this week by the Resolution Foundation. The report has been written by the think-tank’s own economists and experts from The London School of Economics and Political Science (LSE).

The Johnson administration has seemed keen to take a smoke-and-mirrors approach to Brexit, and has appeared at pains to try to blame the myriad and very significant associated woes on something else.

For his part, former Brexit minister Lord Frost yesterday proclaimed in a speech to UK in a Changing Europe’s The World Beyond Brexit conference in London that Brexit “is working”. And he declared the “view that Brexit is hitting us from an economic and trade perspective is in my view generated by those with a bit of an axe to grind on this subject and cannot be supported by any objective analysis of the figures”.

Maybe he too should read the Resolution Foundation and LSE report, if he has not done so already, to gain a fuller understanding of what is occurring.

For a time, the economic effects of the coronavirus pandemic have given the UK Government something to hide behind. However, as The Big Brexit report makes plain, the effects of leaving the European Union, some of which have crystallised already with many very much ongoing, are large indeed.

The report helpfully, given the amount of political spin around Brexit, breaks down the calculated effects on per household and per worker bases. This should make it simple enough for non-experts to understand.

The Big Brexit has been produced by LSE associate professor of economics Swati Dhingra, Resolution Foundation principal economist Sophie Hale and her economist colleague at the think-tank Emily Fry, and Ningyuan Jia, PhD candidate in economics at LSE.

The report notes that “leaving the EU represents the largest change in the UK’s relationship with the rest of the world in nearly half a century”.

It adds: “It is a profound change in economic governance that will reorient production away from trade with the EU and towards the domestic market, impacting people, places and firms across the UK.”

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Furthermore, the report emphasises the long-term nature of the effects of Brexit, contrasting this reality with an impression created by public discourse of a “relatively rapid, one-off impact”.

This has been a major problem all along in terms of the public’s understanding, with the reality having been obscured by incredible spin and effrontery from many of those promoting Brexit.

The report says: “The public discourse, as well as the pre-referendum economic modelling, has focused on describing the anticipated overall economic effects of Brexit, creating the impression that it will have a discrete, and relatively rapid, one-off impact. But the reality is that the impact will be different from that anticipated in a number of important ways. Crucially, it will take time to fully materialise, and will occur in three distinct phases.

“First, in the immediate aftermath of the referendum, and in anticipation of permanent impacts, household incomes and business investment were affected. Second, trade itself responded following the implementation of the new Trade and Cooperation Agreement and the new barriers that this introduced. And third, structural changes to the UK economy will take place over the long term, as capital and labour adjust to the new trading arrangements.”

Of course, the effects of the Brexit drive were felt in a major way immediately after the referendum in June 2016, with The Big Brexit report observing the plunge in sterling triggered by the Leave vote and associated jump in the price of imported products had given rise to an inflationary effect equivalent to an £870 increase in the cost of living per year for the average household.

The report also notes that, “following the referendum, business investment growth slowed dramatically reflecting increased uncertainty and has not yet recovered”.

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Setting out what occurred in the aftermath of the Leave vote, The Big Brexit paper states: “Immediately after the referendum on 23rd June 2016, sterling depreciated. This brought forward the impact on household incomes of what would otherwise be a slow burn change for the UK economy. A year after the referendum, sterling settled at more than 12 per cent below its previous level, and the higher price of imports led to higher inflation, with the resulting increase in the cost of living equivalent to £870 per year.”

It adds: “Meanwhile, firms faced increased uncertainty about the terms on which they might be able to access the world’s largest integrated marketplace, providing a major headwind to investment. UK business investment fell by 0.1 per cent a quarter on average in the three years post-referendum, compared to growth of 1.7 per cent a quarter on average…in the previous three years, and ongoing growth in other G7 countries.”

The numbers in the report tell the story of Brexit very clearly indeed, both in terms of what has happened already and the longer-term effects.

The Brexiters, amid skills and labour shortages fuelled by Brexit, have talked about a high-wage economy. This has always seemed like a most hollow claim, given major economic damage of the type created by Brexit surely inhibits employers’ ability to pay higher wages and weakens living standards.

And The Big Brexit report tells a very different story of the UK’s exit from the EU to the “high-wage economy” spin of the Leave camp, declaring the “main impact will be a real wage and productivity hit, exacerbating the long-standing challenges faced by the UK”.

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It adds: “A less-open UK will mean a poorer and less productive one by the end of the decade, with real wages expected to fall by 1.8 per cent, a loss of £470 per worker a year, and labour productivity by 1.3 per cent, as a result of the long-run changes to trade under the TCA. This would be equivalent to losing more than a quarter of the last decade’s productivity growth.”

What is more, the report emphasises “this analysis assesses only the direct impacts of the new trading arrangement, and does not account for wider impacts on investment levels or changes to migration policy”.

These wider impacts look to be very large too.

The £470 figure for how much a typical worker will be worse off each year by the end of the decade is, again, simple to understand. You do not need to be an expert in economics to see at once that this is again a big number indeed.

The Big Brexit report continues: “Changes in production to focus on the UK market are a significant part of these productivity falls, and help explain why those suggesting that expanding manufacturing sectors can drive productivity gains are likely to be disappointed. Although some manufacturing sectors are expected to expand, these are dominated by lower-productivity sectors (such as food and wood manufacturing): the average productivity of shrinking manufacturing sectors was £47 per hour, compared with just £37 per hour for growing sectors.”

The paper declares that “assessing the impacts of the changes to the UK-EU trading arrangement is important, not to relitigate the merits of leaving the EU decided by a public referendum six years ago, but to ensure policy makers understand how to think about the impacts that have materialised and are still to come”.

It seems unlikely, however, that the Brexiters will be rushing to embrace the report, given its findings. Whether they are wilfully ignoring the effects or do not understand them, or a bit of both, remains difficult to tell.

The Big Brexit report states: “Our analysis finds that, although there is uncertainty over the Brexit impacts that have occurred to date, not least because of the entangled Covid-19 impacts, we should expect the lasting impact of reduced openness to be substantial, and to lead to widespread productivity and real income shocks, much of which has already taken place.”

None of this would seem to be what the Brexiters who dominate the senior ranks of the Johnson administration want to hear. However, they would do well to listen so that at least they are aware of the realities as they set their post-Brexit economic strategy. It is surely important to ensure such a strategy is not based on a total misunderstanding of what has occurred, is happening and is yet to come on the Brexit front.