How's Brexit Going (One Year On): Disaster or Needs Time? - TLDR News

[Music] it's hard to believe but as we enter 2022 it's now been a year since the uk and eu signed their brexit deal a deal that johnson and other brexiteers hailed as a great victory since then though things have unraveled somewhat with both remainers and brexiteers pretty unhappy with how brexit's shaken out with only four percent of remainers saying things are going well and just 34 of brexiteers with the price of food energy and taxes rising and set to continue in 2022 it seems that the brexiteers predictions were wrong ridiculous report uh from some lobby group yesterday saying price food would go up it'll go down our food bills would be lower our energy costs would be lower our tax bills would be lower outside the eu our food bills will be lower our fuel bills will be cheaper our taxes will be lower i think people will be better off in terms of their household budget so let's take a look at what happened since the uk officially left the eu and if brexit is really to blame for any of these issues if you like our videos then be sure to subscribe not only to this channel but the whole tldr family the other channels are linked below thanks for your support so as we mentioned many brexiteers promised that brexit would lead to lower prices across the board now while their predictions haven't materialized thus far as you might have noticed thanks to the highest inflation rate in 10 years prices are actually quite a lot higher than they were a few years ago it would be unfair to therefore conclude that brexiteers were completely wrong after all most developed countries are struggling with inflation not just brexit britain nonetheless one year on lots of these promises are looking somewhat implausible let's start with food one of the purported advantages of brexit was supposed to be lowering food prices now obviously this hasn't happened according to the latest ons data from november food prices are up one percent over the last 12 months but this isn't really to do with brexit for the most part this is a function of the global energy crisis which has pushed transport and production costs up across the board for example one of the consequences of the natural gas shortage has been an increase in fertilizer costs because fertilizer plants rely on natural gas to make ammonia brexit probably contributed after all it's made trading between europe and the uk more difficult and therefore more expensive and the lack of european immigration probably contributed to the uk's hgv driver shortage but it's not the primary cause nonetheless it's clear that brexit hasn't helped food prices brexiteers originally imagined that brexit would bring down food prices by allowing the uk to sign trade deals with countries with more productive agricultural sectors unfortunately for those free market brexiteers it turns out that the trade deals which would in fact bring lower prices usually require lowering standards and this just isn't politically feasible think about chlorinated chicken a full-on uk u.s trade deal would probably mean cheaper chicken for uk consumers but only because it would involve lowering standards to allow for cheaper chlorinated chicken which is as it turns out something the british public just aren't keen on less controversial trade deals with other agricultural economies like new zealand and australia just don't have that much of an impact on food prices largely because the uk government doesn't want to be seen as undercutting british farmers for example the new zealand deal has strict quotas for new zealand lamb and beef imports while the australian trade deal includes a commitment to uphold uk standards the long and short of it is that those cost-cutting free trade deals touted by brexiteers a few years ago have proved politically impossible which is why brexit has so far failed to reduce food prices so that's food onto energy obviously sky-high energy prices have not been confined to the uk as we've explained in other videos gas prices have soared globally and especially in europe this is due to a range of factors including a cold winter last year high lng demands from asia lower supplies available on the market and less wind than normal so what is brexit's role in all this well not much there was a theory in the lead-up to brexit that the uk's leaving the internal energy market would increase uk energy prices it would force the uk to use explicit rather than implicit auctions but it doesn't seem to have had that much of an impact according to full fact there is no evidence that brexit is a significant factor in higher wholesale gas prices in the uk at the moment nonetheless much like with food brexit definitely hasn't helped energy prices when brexiteers claimed that brexit would lead to lower energy prices they were usually making the argument that outside the eu the uk could lower its taxes on energy specifically value-added tax or vat boris johnson himself made this argument in an article penned for the sun back in 2016. and well he had a point sort of since 1993 member states have been required to apply a standard rate of v80 which may not be less than 15 percent with some exceptions for a limited category of goods of which a reduced rate not less than five percent could also be applied domestic energy is one of those exceptions which is why the uk's vat on domestic energy supply has sat at five percent for the last 25 years or so brexiteers argued that leaving the eu would allow the government to cut this rate to zero now there are some qualifications worth noting here first the uk never actually had to subject energy costs to eu vat rules whilst eu member states had to apply a standard rate if they decided to charge v80 they were still allowed to just not charge v80 at all prior to 1994 v80 on energy bills was actually zero and had no changes to that rate been enacted it would still be zero today this is why the republic of ireland despite being inside the eu's vat area does not have v8 on sanitary products it's never charged v80 on sanitary products so the eu's vat rules have never been applied uk energy bills were subject to the eu's vat rules because in 1994 the uk's then chancellor norman lamont decided to impose an 8 vat rate on domestic energy consumption which increased a year later to 17.5 percent before blair cut it in 1997 to the lowest it could be within eu rules five percent and this is where it stayed since there's a five percent rate for domestic energy costs and a twenty percent rate for business energy costs anyway now that we're at the eu have the government taken the opportunity to cut vietnam energy as promised by johnson himself well no despite sky-high energy bills analysis from investec estimates that the energy price cap will hit nearly 2 000 pounds for the average household in april almost double what it was a year ago and the fact that v80 on energy hurts the poorest hardest the government has so far refused to cut vat this is presumably because certain members of the current administration most notably rishi sunak are anxious to balance the budget which means lots of taxes to keep up with johnson's non-stop spending pledges and well as energy costs have risen vat has made the government some serious dough analysis by labour points towards the government receiving what they call a windfall of 3.1 billion pounds due to the vat charged on rising energy prices and this takes us nicely onto the last section of this video taxes as we mentioned at the beginning of the video certain vexities promised that brexit would lead to a low-tax hyper-entrepreneurial singapore-on-sea and well this hasn't happened while the uk has taken the opportunity to cut v-80 on certain items on the day the uk formally left the european union for example it abolished vat on sanitary products otherwise known as the infamous tampon tax the tax burden is currently the highest it's been in 50 years largely thanks to a recent national insurance hike again this is essentially because if he wants to balance the books sunak needs to raise taxes to keep up with johnson's expensive policy projects ironically this development model more taxes and more spending is pretty european eu countries typically have high tax burdens by international standards and accordingly large public services this is a long way from the promised singapore on sea and unsurprisingly has upset some brexiteers in his resignation letter for example former brexit negotiator lord david frost rude what he considered a missed opportunity for britain to transition to a quote lightly regulated low-tax entrepreneurial economy so all in all once we've accounted for the effects of the global inflation re-energy crisis the promised benefits of brexit are apparently yet to materialize but there's one issue that we haven't had a chance to discuss in this video though that of the brexit bus brexit is promised that 350 million pounds a day of new money could be diverted to the nhs thanks to brexit has that happened well if you'd like to find out then like this video and we'll make a part 2 for this video and obviously you'll want to subscribe to be notified whenever that video is released special thanks to our patreon backers who make videos like this one possible and if you want to see your name at the end of videos then sign up by clicking the link below

Channel: TLDR News

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Length: 10min 13sec (613 seconds)

Published: Fri Jan 07 2022