Brexit has damaged the UK’s exports.
I know this from first-hand experience. Before the vote, we exported to Ireland, Spain and Japan. After the vote, nothing.
Japan might seem an odd market to lose. But like many small exporters, we sold through a distributor that bundled together drinks products for Asian markets. Mixing UK and EU products in the same shipment suddenly made the customs paperwork more complex and more expensive. That was enough to kill it.
We weren’t the only ones.
Brexit has reduced UK goods exports to the EU by an estimated 13–15% — roughly a £27 billion hit. Small firms have been hit hardest, and the range of products being exported has narrowed. Food and drink export values have reached record levels, but volumes are still more than 25% lower than in 2019. Services exports are also down, by around 4–5%, as new trade barriers reshape the market.
The reason is not mysterious. Exporting has simply become more difficult.
Before Brexit, the EU offered the UK a deal based on regulatory equivalence. In simple terms, a bottle of gin produced in the UK would be treated as equivalent to one produced in the EU. That would have kept trade relatively frictionless.
This provoked fury among Brexit supporters, because it meant accepting ongoing alignment with EU rules — the dreaded “rule taker” status. It would also have limited the UK’s ability to strike trade deals with countries like the US, where standards differ significantly.
But the alternative we chose was worse.
Boris Johnson’s deal is based on rules of origin. Exporters have to prove where their products — and their components — come from. For food and drink producers, that can mean accounting for the origin of every ingredient. Every juniper berry, every grain of wheat.
This doesn’t just affect exports. It affects imports too, pushing up costs and feeding into higher food prices.
In the jargon, this all sits under phytosanitary regulation. In practice, it is a massive administrative burden.
Not everyone lost out.
Making this system work required hiring large numbers of civil servants and customs staff, and building new facilities around the country. Felixstowe was one of the main beneficiaries. Significant investment went into infrastructure and staffing to manage the new border regime. The area was also designated as part of Freeport East, intended to turn the port into a major hub linking the UK to global trade routes.
There was just one problem.
The system wasn’t ready.
Implementation of the new regime was delayed repeatedly. By the time of the 2024 general election, much of it still hadn’t been introduced. Buildings stood empty. Staff had little to do. Around £391 million was spent on permanent border facilities, with a further £258 million spent on interim sites that were later scrapped.
When Labour came into power, they moved to negotiate a new agreement with the EU on food and drink trade. If successful, much of the phytosanitary regime agreed under Johnson will never be fully implemented. The EU Sanitary and Phytosanitary (SPS) legislation is nearly finalised, and will align the UK with EU regulations. This legislation is likely to contain provisions for the UK to align it’s regulations with the other EU in other sectors without needing future legislation.
In other words, a large chunk of that investment was unnecessary.
I set out to find one of these ghost sites in Felixstowe. I parked up and started walking around the docks with my camera.
Before long, a policeman stopped me. Although I was on public land, I was told I couldn’t take photos of the docks in case they were used by people smugglers bringing in “clandestine” migrants in lorries. He mentioned they encountered a few every day, mostly from Iran and Iraq.
Then things got slightly odd.
We ended up discussing my blog — which he later went away and read — and he helpfully explained that while I couldn’t take photos where I was standing, I could drive round the corner to another car park and take as many as I liked. He even pointed out that the first 30 minutes were free.
I took his advice, moved the car, and carried on.
With the new UK–EU negotiations likely to reduce some of the bureaucracy, the future of that investment in Felixstowe is uncertain.
Politically, it makes for an interesting case. The local council is run by a Green–Lib Dem coalition, with elections not due until 2027. As a coastal town, it ought to be fertile ground for Reform. But high employment and a thriving port make it a more difficult target than places like Clacton further down the coast. The local MP is Labour, holding the seat with a relatively small majority after taking it from the Conservatives in 2024.
The EU told the UK that it wasn’t allowed to cherry pick access to the single market or customs union for specific industries where it was to the UKs advantage. And yet that is exactly what is happening. Bit by bit the UK is aligning with the single market to reduce costs for importers and exporters and reduce prices for customers.
In the past Labour were anxious about Reform and the Conseratives crying sell out over closer ties with the EU and regulatory alignment in key industries. But Trump has highlighed the folly of Brexit and the Government are betting that they are on the right side of public opinion. They are probably right.
It is an odd way to run a country: redesign the system, build the infrastructure, hire the staff — and then quietly decide not to use it. We made trade more complicated, spent hundreds of millions trying to cope with the fallout, and are now backing away from parts of it. If this is what taking back control looks like, it’s hard to see what we actually gained.
