Businesses Continue to Face Economic Fallout from Brexit, Little Change Expected After Election

Eight years after the Brexit vote, businesses in the United Kingdom are still grappling with the economic consequences of the country’s departure from the European Union. Despite the upcoming election, where discussions about the EU divorce have been largely avoided by the main parties, there is little hope for change. Diego Alfonso, owner of the ice-cream parlour “Bertotti,” shared his experience of having to close one of his shops due to the economic impact of Brexit.

Alfonso, who established Bertotti with his wife Suzana in 2012, highlighted the increased bureaucracy and paperwork associated with importing goods from the EU since Brexit. This has led to higher costs for businesses, particularly as inflation rises following the COVID-19 lockdowns and the Russian invasion of Ukraine, which has driven up food and energy prices. The price of a scoop of Bertotti gelato has surged by over 40 percent since the Brexit vote, impacting demand in a country where ice cream consumption is not year-round.

The introduction of new post-Brexit border controls has further exacerbated the challenges faced by businesses, resulting in delivery delays, additional costs, and labor shortages. The UK in a Changing Europe think-tank estimates that the annual cost of new UK customs declarations could reach approximately £15 billion. Other consequences include amended driving regulations and the loss of tens of thousands of young European seasonal workers who were previously allowed to work in the UK without permits.

Bertotti is not alone in experiencing these difficulties. Rivet & Hide, a supplier of high-end men’s clothing, has seen a 50 percent decline in turnover with the EU since Brexit. Owner Danny Hodgson has been forced to raise prices to cover import and export charges, particularly for leather items.

While sectors such as fishing, which supported Brexit, hoped for economic benefits, they now admit that these have not materialized. The Institute for Fiscal Studies and other economists estimate that the long-term cost of Brexit could amount to approximately four percent of UK gross domestic product.

Despite the challenges, businesses like Bertotti have sought alternative ways to generate revenue, such as supplying restaurants and participating in festivals. However, they continue to face significant obstacles and are struggling to regain their pre-Brexit levels of success.

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