Lots of Full Fact readers have asked us to check a number of posts on social media which have claimed that “the economic cost of Brexit now exceeds what we’ve net paid-in to the EU over 47 years”.
While it’s difficult to put a single, definitive figure on the economic impact of Brexit, these claims don’t currently add up. They are based on figures which actually show the UK’s net contributions are higher than an estimated economic cost so far.
Other reports have made a more defensible claim: that Brexit will “have soon cost” or “is set to cost” the UK more than 47 years of payments to the EU budget. But these still depend on accepting an uncertain estimate for the cost of Brexit so far, plus even more uncertain estimates of the future cost. And even then, the figure at the end of 2020 is still slightly lower.
The claims are based on analysis by Bloomberg Economics which found that the “economic cost” of Brexit to the UK was £130 billion by the end of 2019. This looks at how much lower GDP is in real terms than it otherwise might have been had previous trends (from before the vote to leave the EU) continued between 2016 and 2019.
This “cost”, according to the analysis, is set to rise to £200 billion by the end of 2020.
To put that in context, the whole UK economy was worth about £2,144 billion—or £2.1 trillion—in 2018.
Following the publication of the analysis these figures were then compared on social media (not by Bloomberg) to the UK’s total net contributions to the EU.
Bloomberg Economics told us that the £200 billion figure it came up with was an estimate, as it’s impossible to be sure what the economy would have looked like if the UK had voted to remain in the EU in 2016. Many different estimates have been done of the impact of Brexit on the UK, as we’ve written about before.
We haven’t looked in detail at Bloomberg Economics’ calculations, but it’s already clear that its estimates are still less than the UK’s net contributions to the EU.
At the moment we only have figures on what the UK has contributed to the EU up to the end of 2018, so covering 45 years rather than 47. These have been gathered by the House of Commons Library. In that time the UK’s net contribution to the EU between 1973 and 2018 was about £216 billion in real terms (accounting for the way prices change over time and using 2019 prices). The net contribution was £156 billion in cash terms (not accounting for inflation).
Both of these contribution figures are higher than the “economic cost of Brexit” estimated by Bloomberg Economics up to the end of 2019. The real terms figure of EU contributions (the more meaningful of the two) is still higher than the “cost of Brexit” estimated up to the end of 2020.
If you estimate what the UK will have paid in net contributions by 2020, using the latest figures from the Office for Budget Responsibility on the financial settlement with the EU, then it comes to around £222 billion in real terms.