10 claims from the EU referendum campaign

It is five years since a referendum on 23 June 2016 saw the UK vote to leave the EU. Two general elections, three prime ministers and numerous government defeats in parliament on Brexit have followed. But the UK and the EU have also concluded two deals – the Withdrawal Agreement, which set the terms of divorce, and the Trade and Cooperation Agreement, which forms the basis for the new UK–EU trading relationship.

The UK has left the EU, although Brexit will continue to have wide-reaching implications. During the referendum campaign, many people predicted what Brexit would look like – and many politicians, including former and current ministers, made claims about what the future would hold. Who was right? Who was wrong? Read on... 

1. Economy

“A vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession” – George Osborne, May 2016^[1]

The economy did not go into recession, despite the then-chancellor's gloomy predictions. Instead, economic growth remained positive in the aftermath of the Brexit vote. Investment fell, but consumer spending held up better than expected. Consumers did not, it seems, share investors’ fears of the economic implications of leaving the EU. Economic policy also did not respond as the Treasury modelling expected: the Bank of England loosened monetary policy (­which the analysis had not assumed) while there was no post-Brexit tax raising budget (which the analysis had assumed).

However, while Osborne’s warning of a sharp decline did not materialise, the pound depreciated more than 10% overnight^[2] – reflecting investor expectations that the UK would be less prosperous in future – which led to a temporary jump in inflation. Today, the pound remains significantly below its 2015 level, which suggests investors have not changed their mind about the attractiveness of the UK post-Brexit, and economic growth was sluggish in the years following the vote. Indeed, subsequent analyses have shown that the UK grew at least 2% less in the years following the vote than was forecast before June 2016, and underperformed relative to other similar countries.^[3]

With the UK only having recently left the single market, the longer-term economic impacts of Brexit on the economy predicted before the referendum could still emerge over the coming years and decades.

1. HM Government, HM Treasury analysis: the immediate economic impact of leaving the EU, May 2016, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/524967/hm_treasury_analysis_the_immediate_economic_impact_of_leaving_the_eu_web.pdf

2. BBC News, Pound plunges after Leave vote, 24 June 2016, www.bbc.co.uk/news/business-36611512

3. Born B, Müller G, Schularick M, Sedláček P, £350 million a week: The output cost of the Brexit vote, Vox EU, 29 May 2019, https://voxeu.org/article/300-million-week-output-cost-brexit-vote

2. Negotiations

“[It is] reasonable to set out a worst-case scenario of five to 10 years to iron out all the detail of a trade deal” – Dominic Raab, December 2016^[1]

The UK and EU were able to conclude the Brexit process within four and half years – well within some predictions, including the timeline sketched out by Ivan Rogers, then the UK’s ambassador to the EU, which Dominic Raab accepted. The UK wanted to use the Article 50 period to simultaneously negotiate separation issues and the future UK–EU trading and security relationship, but it ended up agreeing to the EU’s wish to sequence the talks. This timetable, and the complexity of negotiating a looser trading relationship, formed the basis for the 10-year ‘worst case scenario’.

However, the government found itself under considerable political pressure to conclude the negotiations more quickly – and then prime minister Theresa May was able to agree a withdrawal deal with the EU just 20 months after triggering Article 50 in March 2017. It was parliament’s opposition to the terms of her agreement, rather than time-constraints, that forced multiple Article 50 extensions – and delayed the UK’s exit from the EU by nearly a year. This left just 11 months in the transition period – agreed to last until 31 December 2020 as part of the Withdrawal Agreement – to negotiate the terms of the UK’s future relationship with the EU.

Even before the coronavirus pandemic swept through Europe, this timetable looked incredibly tight – with the EU’s agreement with Canada taking at least five years. Given that, it was an impressive achievement for Lord Frost’s team to secure a last-minute Christmas Eve deal. But there are still elements of the future relationship that need to be wrapped up – with details to be resolved in the governance structures overseeing the Trade and Cooperation Agreement.

The rapid pace of negotiations resulted in complex agreements and involved serious trade-offs. In Northern Ireland in particular, Boris Johnson’s government rushed to conclude an agreement without fully considering the consequences. 

1. BBC News, EU trade deal 'easiest in human history', 20 July 2017, www.bbc.co.uk/news/av/uk-40667879

3. Trading relationship with the EU

“It would be a return to the bad old days of endless forms and burdensome bureaucracy” – David Cameron, March 2016^[1]

The UK’s trading relationship with the EU fundamentally changed at the end of the Brexit transition period, with the UK leaving both the EU single market and customs union.

To some extent, UK firms are still able to trade freely with the EU. The UK-EU Trade and Cooperation Agreement provides for zero-tariffs and zero-quotas on goods traded with the EU – unique in EU trade agreement with third countries.

But, as then prime minister David Cameron had warned, firms now face extensive new non-tariff barriers when trading between Great Britain and the EU, including a range of new customs and regulatory paperwork and checks. To take advantage of zero-tariffs, businesses also have to comply with complex rules of origin requirements, and they face separate EU and UK regulatory regimes in areas like product standards and chemicals (which the chemicals industry estimated could cost the sector £1 billion).^[2] Services firms also face new barriers to trade, with UK firms forced to navigate a complex patchwork of sector and member state exceptions.

Has the increased friction had an impact on trade? Initial figures suggest so, with Office for National Statistics figures showing that trade in goods with the EU fell by 20.3% between Q4 2020 and Q1 2021 (versus a 0.4% fall for trade with non-EU countries)^[3], but April’s figures show exports of goods to the EU rebounding more strongly than imports^[4], perhaps indicating that businesses are adjusting to the new requirements. However, it is still too early to assess the full impact of Brexit on UK trade, or to disentangle it from disruption caused by Covid.

1. Prime Minister's Office, 10 Downing Street and The Rt Hon David Cameron, PM speech at Vauxhall on the EU referendum: 10 March 2016 (Archived), GOV.UK, 10 March 2016, www.gov.uk/government/speeches/pm-speech-at-vauxhall-on-the-eu-referendum-10-march-2016

2. Foster P, ‘UK chemical industry wars of £1bn cost to duplicate EU regime’, Financial Times, 3 August 2020, retrieved 3 August 2020, www.ft.com/content/a1c4a5dc-f627-4689-97ae-909d4aaf6162

3. Office for National Statistics, The impacts of EU exit and the coronavirus on UK trade in goods, www.ons.gov.uk/businessindustryandtrade/internationaltrade/articles/theimpactsofeuexitandthecoronavirusonuktradeingoods/2021-05-25

4. Office for National Statistics, UK trade: April 2021, www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/uktrade/april2021

4. Fisheries

“Whilst Britain is in the EU we cannot take measures to protect our fishing industry and stocks. And if we Vote Leave we can take back control over UK waters, set our own fishing policies, and support our fishermen.” – Boris Johnson, June 2016 ^[1]

Fisheries was a hotly contested topic during the 2016 referendum campaign and proved a sticking point during the UK–EU negotiations despite representing just 0.02% of the UK economy in 2019.^[2]

The UK is no longer part of the EU’s Common Fisheries Policy and is now an independent coastal state. The terms of the Trade and Cooperation Agreement mean that UK vessels will gain a larger share of fish caught in UK waters from around half to two-thirds, with 25% of the value of the EU catch in UK waters being transferred to UK boats (worth approximately £146 million per year).^[3] There is an ‘adjustment period’ in place until 2026, after which there will be annual negotiations. In the future, the UK could choose to exclude EU vessels from UK waters. However, doing so could lead to retaliation from the EU, including exclusion of UK boats from European waters or tariffs on UK fish exports or on other UK exports, so long as this was ‘proportionate’ to the economic impact of EU boats being excluded from UK waters.

Although the deal gives UK fishers a greater share of the catch from UK waters, organisations like the National Federation of Fishermen’s Organisations have expressed disappointment.^[4] They argue there has only been ‘marginal’ changes to quota shares, and shares for some species – such as Channel cod – will remain unchanged. EU vessels have also retained the right to fish in the 6–12 mile zone of UK territorial waters when many UK fishers had hoped the deal would grant them exclusive rights to fish in UK territorial waters, up to 12 miles offshore. UK seafood producers also face new checks and paperwork when exporting their products to the EU, with many experiencing delays and increased costs. Some shellfish producers have been unable to export to the EU at all since the start of the ear, due to EU rules on imports from third countries.

1. Boris Johnson, Facebook post, 16 June 2016, www.facebook.com/borisjohnson/posts/10153762887651317

2. Uberoi E, Hutton G,  Ward M and Ares E, UK Fisheries Statistics, House of Commons Library, 23 November 2020, https://commonslibrary.parliament.uk/research-briefings/sn02788

3. Department for Environment, Food & Rural Affairs, HM Treasury, Office of the Secretary of State for Scotland, The Rt Hon George Eustice MP, The Rt Hon Steve Barclay MP, and David Duguid MP, New financial support for the UK’s fishing businesses that export to the EU, GOV.UK, 19 January 2021, www.gov.uk/government/news/new-financial-support-for-the-uks-fishing-businesses-that-export-to-the-eu

4. Morris S and Caroll R, 'Betrayed': UK fishing industry says Brexit deal threatens long-term damage, The Guardian, 28 December 2020, www.theguardian.com/politics/2020/dec/28/betrayed-uk-fishing-industry-says-brexit-deal-threatens-long-term-damage

5. Security

“So my judgement, as home secretary, is that remaining a member of the European Union means we will be more secure from crime and terrorism.” – Theresa May, April 2016^[1]

When the UK was a member state, it had access to a suite of measures which facilitated cooperation on policing and criminal justice. Leaving the EU without an agreement would have meant the UK falling back on arrangements that are more cumbersome and less effective. As Theresa May suggested, no deal – and the loss of the close integration between the UK and the EU on security matters – would have made it harder to detect and prosecute criminals.

So has the agreement with the EU avoided May’s fears? While the Trade and Coopeartion Agreement does not replicate previous measures, Julian King, the UK’s former European Commissioner for the Security Union, described the arrangements as “pretty good”.^[2] For example, the arrangements on extradition go further than Theresa May predicted back in April 2016 (although is not equivalent to the European Arrest Warrant), and an agreement was reached to allow the UK and the EU to continue to share passenger name records and DNA and fingerprint data – both of which Theresa May doubted would be possible before the referendum (although subsequently asked for as prime minister).

There have been losses, however, the most obvious being access to the Schengen Information System (SIS II) database, which allowed for the real-time sharing of data on missing or wanted objects or people (and was consulted by the British police forces 600 million times in 2019). What this means for the ability of the UK’s security services to keep British citizens safe will depend on the success of the available alternatives – in particular Interpol data-sharing, which is widely seen as far inferior to SIS II – and the willingness of EU member states to share valuable data on Interpol as well as SIS II.

1. Home Office and The Rt Hon Theresa May MP, Home Secretary’s speech on the UK, EU and our place in the world (Archived), GOV.UK, 25 April 2016, www.gov.uk/government/speeches/home-secretarys-speech-on-the-uk-eu-and-our-place-in-the-world

2. House of Lords Select Committee on the European Union Security and Justice Sub-Committee, Corrected oral evidence: Post-Brexit UK-EU security co-operation, 12 January 2021, https://committees.parliament.uk/oralevidence/1533/pdf

6. Northern Ireland

‘The situation [at the Irish border] would be absolutely unchanged’ – Boris Johnson, February 2016^[1]

The issue of the Irish border has been problematic throughout the Brexit process. The UK and EU agreed early on the need to prevent physical infrastructure or checks on the island of Ireland, but the arrangements for achieving this has been a key stumbling block in negotiations. Theresa May’s proposed solution — the ‘Irish backstop’ — would have kept whole of the UK in a customs union with the EU if the border issue could not be resolved through the future relationship negotiations – a key reason her deal was rejected by her backbenchers. Boris Johnson’s alternative – the Northern Ireland protocol – places obligations on Northern Ireland only, in effect creating barriers to trade in the Irish Sea.

Post-Brexit, goods can continue to travel freely between Northern Ireland, the Republic of Ireland and the rest of the EU. The protocol also protects the Common Travel Area, so UK and Irish citizens retain the same rights to live, work and access public services across the UK and the whole of the Republic of Ireland as they had before the UK’s exit from the EU. Although there are new north–south barriers in some areas, including services trade and data sharing, Johnson was right to say the Irish border has remained largely unchanged.

However, new checks and processes are now required on goods moving between Great Britain and Northern Ireland. The application and implementation of those checks remains a point of ongoing contention between the UK and the EU, and the protocol has received fierce opposition from Northern Ireland’s unionist community. Members of the Northern Ireland assembly will be given the opportunity to vote on whether they consent to the continued operation of trade-related aspects of the protocol in 2024; if they vote against it, the UK and the EU will be tasked with finding different arrangements.

Watch our video on the Northern Ireland protocol

1. BBC News, Boris Johnson: Brexit would not affect Irish border, 29 February 2016, www.bbc.co.uk/news/uk-northern-ireland-35692452

7. Regulatory freedom

“By wresting back democratic control over how our laws are made, we can cut unnecessary regulation.” – Dominic Raab, 2016^[1]

Taking back control of UK laws and removing the jurisdiction of the European Court of Justice, was a red line during the Brexit negotiations. The deal the government negotiated does not require the UK to follow EU law and allows the UK to regulate independently – at least for Great Britain: under the protocol, Northern Ireland must still apply EU law in some areas.

So far, not much has changed, with most EU rules having been copied over onto UK the statute book on 31 December 2020. The UK government now has the opportunity to regulate in a way that better suits the needs of the UK economy or reflects different policy preferences. But, as a recent IfG paper shows, it will need to weigh up the benefits of doing things differently against the possible costs. These could include trade disputes with the EU; making British businesses less competitive, by requiring firms to follow two sets of rules, not one; and creating regulatory divergence between the four nations of the UK.

Having fought for this control, it is still unclear how the government will exercise it. There have been various government papers suggesting possible reforms – such as permitting greater use of genetically engineered organisms or a simpler regulatory regime for domestic banks. Many of these were recently endorsed by the new taskforce set up by the prime minister to identify post-Brexit regulatory opportunities. But there is unlikely to be a ‘bonfire’ of EU rules.

Changes in some areas – like those on working time – look unlikely. The government rowed back on proposed reforms earlier this year after public opposition, with polling suggesting that the public do not want to weaken standards.

Notably, some of the debate in the UK government is not really about departing from EU rules at all, but rather using its new found regulatory freedom as a political opportunity to tweak rules it could anyway have changed as a member.

Watch our video on taking back control of regulation

1. Dominic Raab, The Rewards of Leave 1) More jobs, Conservative Home, 12 April 2016, www.conservativehome.com/platform/2016/04/dominic-raab-voting-leave-will-be-good-for-jobs.html

8. Immigration

“By voting to leave we can take back control of our immigration policies” – Priti Patel, May 2016^[1]

The UK government is now able to control EU immigration in a way that has not been possible for decades. At the end of the transition period, free movement of people ended and the UK introduced a new points-based immigration system that applies equally to EU citizens (aside from those living in the UK before the end of the transition period) and citizens from the Rest of the World.

The new regime is therefore much more restrictive for EU citizens than that it replaced. They must now meet visa eligibility criteria such as a work sponsorship, minimum salary thresholds and English language requirements.^[2] However, it is more permissive towards immigrants from outside the EU. For example, the cap on the number of skilled workers has been removed, the general salary threshold has been reduced and employers no longer need to demonstrate that a role cannot be filled by the UK labour force.

EU citizens resident in the UK at the end of the transition period can continue to live and work in the UK has before – in line with the commitments made in the Withdrawal Agreement. However, those eligible must register with the EU Settlement Scheme by the end of June 2021. As of the end of May, just over 5.6 million applications had been received, much more than the 3 million the government initially expected.^[3]

1. Cecil N, Minister Priti Patel: Quit EU to save our curry houses, Evening Standard, 18 May 2016, www.standard.co.uk/news/politics/minister-priti-patel-quit-eu-to-save-our-curry-houses-a3251071.html

2. Pickard J,Vote Leave woos British Asians with migration leaflets, Financial Times, 19 May 2016, www.ft.com/content/94adcefa-1dd5-11e6-a7bc-ee846770ec15

3. Home Office, EU Settlement Scheme statistics, GOV.UK, 30 May 2019, www.gov.uk/government/collections/eu-settlement-scheme-statistics

9. Rest of the world trade deals

“Leave campaigners say countries would queue up to sign trade deals with us, and sign them quickly. But I believe that is guesswork. And guesswork at a time when we need facts.” – David Cameron, 2016^[1]

The freedom to negotiate and sign its own free trade agreements (FTAs) was one of the central goals of the government throughout the negotiation period. By taking the UK out of the customs union and single market, the Trade and Cooperation Agreement (TCA) achieved this aim, although the Department for International Trade was initially focused on ‘rolling over’ the trade agreements the UK was already party to as an EU member over striking new trade deals. As of April 2021, the UK had rolled over 37 (out of 40) such agreements.^[2]

The UK has now entered trade talks with other parties, including Australia, New Zealand and the 12-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Australia deal is the first negotiated from scratch since the UK left the EU and was concluded relatively quickly – it was agreed in principle in June.^[3] There is still a way to go before it is ratified though, and the process has highlighted some of the trade-offs facing the UK as an independent trading nation. In this case, these centred on the concerns of UK farmers over lower environmental standards in Australia and the impact that increased competition will have on their profitability.^[4]

The government has made a good start in commencing negotiations now the UK is outside of the EU – but there is still some doubt over whether or not it has a coherent trade strategy which will ensure the FTAs that are negotiated are in the interest of the UK.

1. Prime Minister's Office, 10 Downing Street and The Rt Hon David Cameron, PM speech at Vauxhall on the EU referendum: 10 March 2016 (Archived), GOV.UK, 10 March 2016, www.gov.uk/government/speeches/pm-speech-at-vauxhall-on-the-eu-referendum-10-march-2016

2. Horne A, Post-Brexit trade: has the Government achieved its aims?, UK in a Changing Europe, 29 April 2021, https://ukandeu.ac.uk/post-brexit-trade-has-the-government-achieved-its-aims

3. Department for International Trade, UK-Australia FTA negotiations: agreement in principle, GOV.UK, 17 June 2021, www.gov.uk/government/publications/uk-australia-free-trade-agreement-negotiations-agreement-in-principle/uk-australia-fta-negotiations-agreement-in-principle

4. National Farmers Union, NFU responds to UK-Australia trade agreement in principle, 15 June 2020, www.nfuonline.com/news/latest-news/nfu-responds-to-uk-australia-fta-agreement-in-principle

10. The union

“If we vote to leave, then I think the union will be stronger.” – Michael Gove, May 2016^[1]

While the UK-wide 52% Leave vote gave the government a mandate for Brexit, a majority of people in Scotland (62%) and Northern Ireland (56%) voted Remain. Brexit has reopened constitutional questions in Northern Ireland, as discussions around borders have taken place, and in Wales talk of Welsh independence has increased – albeit from a low base, but it is in Scotland that the past five years has placed the most strain on the union.

Despite a few polls immediately after the vote showing an uptick in support for independence, for the first two and a half years of the Brexit process, there was little evidence that it was having a major impact on attitudes towards the union – with a narrow but clear lead for No in a second referendum polling in Scotland. But, in April 2019, the polls began to narrow and support for independence began to rise, with polling experts citing opposition to Brexit as a key factor.^[2]

The SNP was re-elected to Holyrood in May 2021 on a promise to deliver a second independence referendum in its next parliamentary term. It is not clear how Westminster will respond to a request for the power to hold a second vote, and with both pro-independence and pro-union politicians intensifying their efforts to appeal to the public, opinion may continue to fluctuate significantly. But Brexit has unquestionably brought difficult questions about the future of the union, and its long-term viability, into sharp focus. 

1. The Andrew Marr Show, Transcript: interview with Michael Gove, 8 May 2016, http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/08051604.pdf

2. Curtice J and Montagu I, Is Brexit fuelling support for independence?, What Scotland Thinks, https://whatscotlandthinks.org/wp-content/uploads/2020/11/SSA-2019-Scotland-paper-v5.pdf