True cost of Brexit on UK trade revealed as calls to rejoin single market grow

Brexit is costing the UK £11.7bn a year in lost exports, stark new figures show, piling further pressure on Andy Burnham to rejoin the EU’s single market and customs union.

The damning findings by Logistics UK, which represents freight companies and is one of the largest trade associations in the UK, show that the loss in revenue compared with 2019 is worth £400 per household in the UK per year.

The organisation has called on the prime minister to push for greater alignment with EU regulations as campaign groups ramp up pressure to find a pathway for Britain back into the bloc.

It comes as a major new business survey by the European Movement UK has revealed that 72.8 per cent of firms say that Brexit has had a negative impact on their businesses, 96.4 per cent say it has had a negative impact on their communities, and 98.2 per cent want the UK to rejoin the EU’s single market.

Logistics UK head of trade James Mills said: “Greater trade matters because it is closely linked to productivity. It gives businesses access to larger markets, encourages investment and allows successful firms to specialise and grow. Yet Britain’s recent performance points in the wrong direction.”

He said there is “a huge prize” in economic growth to be had by fixing the loss in trade and noted that since the UK voted to leave the EU in 2016, UK goods exports by tonnage have fallen 20.7 per cent. Export volumes to the EU have fallen 15.9 per cent, while exports to the rest of the world have fallen 37.2 per cent.

open image in gallery

That’s despite promises of a trade boom with the rest of the world made by Nigel Farage, Boris Johnson and other leading Brexiteers at the time of the referendum.

The findings emerged in a week where Mr Burnham disappointed many with his decision to stick to Keir Starmer’s red lines on Brexit and not rejoin the single market or customs union.

That is despite Labour MPs overwhelmingly being in favour of rejoining both and a vote being passed in the Commons supporting the move.

Mr Burnham has previously said he supports rejoining the EU and earlier this week promised to be “bolder” than Sir Keir in his forthcoming Brexit reset talks due to take place next month.

Mr Mills said unnecessary paperwork, border complexity and duplicated processes due to Brexit were making exporting harder and more expensive than it needs to be.

open image in gallery

“At a time when finding sustainable ways to grow the economy is more important than ever, reducing those frictions is one of the clearest opportunities available. Fix how we trade, and we can help fix how we grow,” he added.

Research published by HM Revenue and Customs (HMRC) last summer put the administrative burden of Britain’s import and export declarations with the EU, which became necessary after Brexit, at £1.8bn in 2022 alone, across 38.6 million declarations. At HMRC’s own timings of 19 to 28 minutes each, that is 15 million hours a year that could have been spent more productively.

Mike Galsworthy, chair of the European Movement UK, said: “The absolute killer on our businesses, large and small, is paperwork. What hurts is the sheer time, cost and risk of it. Brexit is a huge source of that paperwork, creating vast barriers where previously there were none. Rejoining the single market and customs union, or better, the EU outright, would remove it entirely.”

Naomi Smith, chief executive of Best for Britain, which campaigns for the UK’s renewed EU membership to get the country’s Gross Domestic Product growing again, said: “Ministers must urgently prioritise practical reforms to address this crisis, but at the bigger picture level, if Burnham really want to secure good growth and lower the cost of living he cannot afford to overlook the GDP growth on offer via EU membership, which independent analysis finds could have almost ten times (£92bn) the impact of these measures.”

Daisy Cooper, the Lib Dem Treasury spokeswoman and deputy leader, said the government “cannot sustain its red lines on Europe anymore” and called for action to help struggling businesses.

“It should take up the Lib Dem plan to unleash British business and slash red tape by striking a deal for a new customs union with the EU and joining the single market. That is the single biggest lever the government can pull to finally get our economy growing again,” she said.

The impact of Brexit on UK businesses is clear, with almost 80 per cent of firms polled telling the European Movement’s Business Impact Survey they were pessimistic about their future prospects.

Mike Donovan, who runs Apparel Studio Stockport, said its earnings were cut in half almost overnight after the EU voted to leave the bloc.

“The 12 per cent tariffs on all imports and exports drastically decreased our profits, which meant we had to change our business model and move our manufacturing to countries like Turkey,” he said.

Austin Wildmore, from Paws Pet Transport, said: “When the Brexit referendum happened, I didn’t believe any UK government would seek the deal we ended up with; I couldn’t imagine a government would inflict this on its own nation.

“However, as soon as the final agreement was in place and we were faced with a hard tariff Brexit, my business was affected overnight. Suddenly, all our veterinary licenses were null and void, and there were no reciprocal licenses available. Our biggest problem was border control in the UK.”

Marco Forgione, director general of the Chartered Institute of Export and International Trade, said, it was right to say trade intensity had slipped since Brexit.

But he claimed the services trade, such as banking and tourism, had “more than offset” a large part of the weakness in goods being traded, with services exports up from £340bn in 2019 and to £546bn in 2025.

“Where Logistics UK is right is that compared to G7 nations UK real trade volumes have lagged since 2019. Services growth has not been enough to bridge the gap,” he added.

The Independent has contacted the Department for Business and Trade for comment.

open image in gallery

What you will get by joining:

• A dedicated community: We are fully committed to the long haul, consistently campaigning to secure the absolute best deal for Britain within Europe.
• Free weekly newsletter: Every Wednesday, political editor David Maddox and political correspondent Millie Cooke will be in your inbox with exclusive reporting, analysis and insight on the biggest developments shaping relations between Britain and Europe. Each week, they will explain what’s happened, what it means, and what the key political figures, experts and decision-makers are saying about it.
• Essential continental updates: Stay informed with regular briefings on the biggest developments in European politics and the specific policies that could pave the way for closer EU relations.

There are even more benefits if you subscribe for just £1 for seven months:

• Exclusive content: Get the highest quality analysis, opinion and debate from political experts across the UK and Europe by subscribing to our premium service.
• The Brexit Effect: You’ll get exclusive access to extracts from Anthony Seldon’s major new book, The Brexit Effect, offering an unparalleled analysis of the 10 years since the referendum.
• Inform the debate: Receive exclusive invitations to live events, webinars, expert Q&As and podcast recordings.