{"id":261353,"date":"2025-07-13T10:35:15","date_gmt":"2025-07-13T10:35:15","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/261353\/"},"modified":"2025-07-13T10:35:15","modified_gmt":"2025-07-13T10:35:15","slug":"britains-services-industry-has-been-hit-hard-by-brexit-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/261353\/","title":{"rendered":"Britain\u2019s services industry has been hit hard by Brexit \u2013 The Irish Times"},"content":{"rendered":"

One by one the supposed pillars of the economic argument for Brexit <\/a>have been knocked away by the realities. Far from being shackled to a corpse, as some Brexiteers described the European Union<\/a> economy, both the euro zone and the EU have grown faster than the UK since the 2016 referendum. Britain\u2019s goods exports have slumped compared with the rest of the G7.<\/p>\n

\u201cLook at services,\u201d Brexiteers cry. Their export growth has been exceptional, according to Policy Exchange, the right-of-centre think-tank. The Office for Budget Responsibility also noted a year ago that UK services trade growth had been the strongest in the G7.<\/p>\n

Should the UK be happy that its trade in services has performed well? Was this the result of Brexit? <\/p>\n

The short answers are \u201cno\u201d and \u201cno\u201d. Instead it should be annoyed that services exports did not grow even more, and blame Brexit for this disappointment, according to new research from the London School of Economics.<\/p>\n

Before explaining the findings, it is important to note that although the UK economy has many weaknesses, services are a strength. While television crews will always want to picture industries such as manufacturing or fishing to visually describe what makes a country wealthy, this is not relevant to 80 per cent of Britain\u2019s economic activity. <\/p>\n

The UK\u2019s success lies in its lawyers, information providers, creative types, management consultants and educators. A handful of universities generate more export income than the entire fishing industry, for example.<\/p>\n

[\u00a0Post-Brexit export drive hampered by UK trade finance regulations, ICC warnsOpens in new window<\/a>\u00a0]<\/p>\n

Unusually for any economy, UK services exports exceed those of goods and not by a trivial amount \u2013 almost 40 per cent higher in 2024, with the gap widening. The OBR noticed, however, that not all of the UK\u2019s services exports appeared equally strong. <\/p>\n

Business services including management consultancy and research and advertising \u2013 where Brexit barriers were small or nonexistent \u2013 were growing strongly. Other services did not perform nearly as well, including finance and transport, where the barriers erected by leaving the single market were significant. But the fiscal watchdog left its analysis hanging.<\/p>\n

\"\"The Juggle: the issues facing women with young children when balancing childcare and their careers<\/p>\n

Picking up the baton has been left to LSE team economists Shania Bhalotia, Swati Dhingra and Danyal Arnold. Using data that allowed comparison of the growth in services trade across different sectors and between a large number of pairs of countries, they examined how strong UK services exports were in each sector compared with all other countries. <\/p>\n

They also meticulously examined the UK-EU Trade and Co-operation Agreement to document which services exports into the EU faced new barriers after the post-Brexit deal came into effect in 2021.<\/p>\n

The results are stark. The OBR was right to note that UK services exports facing new Brexit barriers appeared to perform worse. UK exports to countries with greater barriers were hit much harder. Where the most extreme barriers were introduced, services exports fell 90 per cent.<\/p>\n

[\u00a0Brexit was \u2018single stupidest thing a country\u2019s ever done\u2019Opens in new window<\/a>\u00a0]<\/p>\n

On average there was a 16 per cent drop in services exports to the EU in sectors where Brexit imposed new trade frictions compared with bilateral trade between other countries in the same sectors.<\/p>\n

Did Brexit allow British companies to focus on trade with the US and other countries? Again, the answer was \u201cno\u201d. Overall, the research found that UK services exports five years after Brexit were 4-5 per cent lower than they would have been without the effect of new trade frictions.<\/p>\n

In a nation that struggles to accept its relative economic decline since Brexit, the UK has been far too quick to celebrate the better performance of services. Instead of showing that Brexit might have some benefits, it simply shows that the UK had specialised in the right industries at the right time, allowing many world-class companies to sell globally. <\/p>\n

Rather than generate \u201cglobal Britain\u201d, leaving the EU has had one simple effect: economic harm. Without Brexit, they would have done even better. \u2013 Copyright The Financial Times Limited 2025<\/p>\n","protected":false},"excerpt":{"rendered":"One by one the supposed pillars of the economic argument for Brexit have been knocked away by the…\n","protected":false},"author":2,"featured_media":261354,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5226],"tags":[802,748,2000,299,5187,1699,4884,16,3106,15],"class_list":{"0":"post-261353","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-brexit","8":"tag-brexit","9":"tag-britain","10":"tag-eu","11":"tag-europe","12":"tag-european","13":"tag-european-union","14":"tag-great-britain","15":"tag-uk","16":"tag-uk-politics","17":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114845484696578905","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/261353","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=261353"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/261353\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/261354"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=261353"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=261353"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=261353"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}