Average Food Shop Up £200 Because of Brexit
Never mind the cost of living; it’s time to highlight the cost of leaving. New research has been released by the London School of Economics (LSE) that suggests the increase in bureaucracy has pushed food prices up from imports by at least 6%. Amidst the cost of living crisis, this is another issue that has been hitting the poorest households the hardest.
The research itself was methodical in its approach to ensure only the effects of Brexit were analysed. This included new requirements for imports and extra paperwork, for example. An astonishing 50-88% of these price rises have been passed onto the consumer, with higher prices for items that have more checks in place at the border, like meat. This has been one of the major factors in pushing inflation up so high in the past year. Food inflation is currently sitting at 12.4%.
The LSE research was quick to point out that Brexit added £6 billion to food bills in both 2020 and 2021, with prices increasing around 3% each year. ¾ of UK imports were from the EU bloc, and Brexit was always going to have an impact on prices. Many Bank of England figures have now started to speak out about the financial damages Brexit has done, being able to remain silent on this issue no more. According to the latest YouGov poll, 56% of the British public now believe Brexit was a bad idea, while only 32% say it was the right decision.
When we were part of the EU, the trade barriers were minimal and the trust was deep. Since leaving the bloc at the start of 2021, red tape and an increasing amount of forms, checks and steps have been in place, which is costing businesses more. They have had no choice but to pass on at least half of the cost onto consumers. Debate in Parliament, however, has not been on the cards. Rishi Sunak has refused to allow for looser immigration rules from the EU to cover labour shortages and is not interested in revising any of the laws for businesses and the damaging barriers of trade.
The only benefit of Brexit that the report highlighted was that UK businesses now faced less competition. However, the report also went on to conclude that this was far outstripped by the loss to shoppers by almost £1 billion. Even the Office for Budget Responsibility gave an updated economic outlook, saying that Brexit has had an adverse impact on trade.
According to the Centre for European Reform, half of the UK’s £55 billion deficit has been a result of leaving the EU. John Springford went on to say that the massive tax rises implemented by Rishi Sunak earlier in the year, when he was chancellor, wouldn’t have been necessary had the UK remained inside the European Union. Since leaving the bloc, it has cost the public finances around £30 billion each year. With all of this information in mind, it’s no wonder that the UK is the only G7 economy not to have recovered to pre-pandemic levels, according to the Office for National Statistics.