The Brexit Effect: Five Major Shifts in the UK Since 2020

On 31 January 2020, the United Kingdom officially left the European Union, ending 47 years of membership. However, it remained in the EU single market and customs union for an additional 11 months to maintain trade stability.

Northern Ireland followed a separate arrangement.

Brexit was one of the most divisive political events in recent history, fueling debates that continue today. Now, five years on, we examine five key ways Brexit has reshaped the UK.

1) Trade

Since 1 January 2021, when the UK fully exited the EU single market and customs union, economists and analysts have largely assessed the impact on goods trade as negative.

Although the UK negotiated a free trade agreement with the EU—avoiding tariffs on imports and exports—businesses now face non-tariff barriers such as time-consuming customs checks and complex paperwork.

Source: ONS

How Much Has UK Trade Suffered?

Some studies estimate UK goods exports are 30% lower than they would have been had the UK remained in the EU.
Others suggest the decline is only 6%.
The Office for Budget Responsibility (OBR), the government's independent forecaster, maintains that Brexit will ultimately reduce exports and imports by 15% and shrink the economy by 4%, equivalent to a £100 billion loss in today’s money.

Small businesses appear to be hit the hardest, as they struggle to cope with post-Brexit bureaucracy.

Are There Any Trade Gains?

The UK has secured trade deals with Australia and New Zealand and is pursuing agreements with the United States and India.
However, government assessments suggest that these deals will not compensate for lost EU trade, making up only 14% of what was lost.
Some economists argue that regulatory independence could bring long-term benefits, particularly in emerging sectors like artificial intelligence.

Source: UK Government impact assessments

2) Immigration

Immigration was a key issue in the 2016 Brexit referendum, particularly the end of freedom of movement, which previously allowed UK and EU citizens to work, study, and live freely across member states.

What Has Changed?

EU net migration (immigration minus emigration) fell sharply after Brexit.
However, non-EU migration has increased significantly since 2020, driven by demand for health and social care workers and the rise of international students.

Why the Increase in Non-EU Migration?

UK universities aggressively recruited overseas students to offset financial difficulties.
In 2021, the government restored post-graduation work rights, making the UK more attractive for international students.
More recent visa restrictions have limited the number of dependents for student and work visa holders.

Source: ONS

3) Travel

Ending freedom of movement has affected both tourism and business travel.

How Travel Has Changed for UK Citizens:

Short visits to the EU are still allowed for up to 90 days within a 180-day period without a visa.
EU citizens can stay in the UK for up to six months visa-free.
UK travelers can no longer use EU fast lanes at border crossings.

Upcoming Travel Rules

2025: New EU Entry Rules

The Entry/Exit System (EES) will introduce biometric fingerprint and facial scans for non-EU travelers.
The European Travel Information and Authorization System (ETIAS) will require UK citizens to apply for a €7 (£5.90) travel permit, valid for three years.

2025: UK’s ETA System

The UK will introduce a similar Electronic Travel Authorization (ETA) for EU visitors, costing £16.

There are concerns that the new EU entry system could cause delays at border crossings.

4) Laws

One of the key promises of Brexit was legal sovereignty, allowing the UK to make its own laws without following EU regulations.

What Happened to EU Laws?

To minimize disruption, the UK initially retained 6,901 EU laws covering areas such as workers’ rights, food safety, and environmental standards.
The Conservative government initially planned to scrap all EU laws by 2023, but only 600 laws were repealed, with 500 more set for removal in financial services.
Some EU laws have already been amended, including:
- Banning the export of live animals for slaughter
- Relaxing restrictions on gene-edited crops
- Allowing VAT on private school fees, which was previously prohibited under EU law

While Brexit freed the UK from EU tax rules, many changes—such as removing VAT on sanitary products—were later adopted by the EU as well.

5) Money

The cost of EU membership was a central issue in the Brexit referendum, with the Leave campaign famously claiming the UK sent £350 million per week to Brussels.

How Much Did Brexit Save?

In 2019-20, the UK’s gross contribution to the EU budget was £18.3 billion per year (~£352 million per week).
However, the UK also received funding from the EU, including:
- £5 billion in grants to farmers and economically disadvantaged regions
- A £4 billion rebate, which never left the UK
Net savings from Brexit are estimated at £9 billion per year, though this figure remains uncertain.

Ongoing EU Payments

Despite leaving, the UK is still paying the EU under the Brexit Withdrawal Agreement, totaling £14.9 billion between 2021 and 2023, with £6.4 billion more due over the coming years.

Additionally, the UK rejoined the EU’s Horizon scientific research scheme in 2023, requiring £2 billion annual contributions. Historically, the UK has been a net beneficiary of this program due to the high number of grants awarded to UK-based scientists.