Britain is missing out on as much as £100m a week because a key post-Brexit agreement with the European Union has yet to be finalised, according to new analysis, prompting fresh calls for Sir Keir Starmer to break what critics describe as the Brexit economic “doom loop”.
Months after the prime minister unveiled a much-vaunted Brexit “reset” alongside Ursula von der Leyen, one of the most economically significant elements of the deal remains unfinished. The proposed sanitary and phytosanitary (SPS) agreement covering food and drink exports has still not been concluded.
The SPS deal would align UK food and animal health standards with those of the European Union, removing the need for most certificates and physical checks on animals and plants moving between Britain and the EU. Economists say this would dramatically cut red tape and boost imports and exports on both sides of the Channel.
New research by the House of Commons Library estimates the agreement could be worth up to “£14 million per day” once the UK economy has fully adjusted, equivalent to almost £100m a week. The analysis noted the figure could fluctuate depending on seasonal trading patterns, weekends and bank holidays.
The findings have led to mounting pressure on ministers to accelerate talks. Al Pinkerton, Europe spokesman for the Liberal Democrats, who commissioned the research, said: “The government went to great lengths to show off their shiny new plans to agree an SPS deal with the EU in May. Six months later there’s nothing to show for it and the British public are millions of pounds worse off a day because of their inaction.”
He added: “Ministers must stop dithering, grip this economic crisis and deliver the SPS deal they’ve promised – finally cutting the reams of red tape holding British business back.”
The government rejected claims of inaction, with a spokesperson saying: “We secured a landmark deal with the EU in May, resetting our relationship to deliver for the public.” The spokesperson added: “It’s a shame the Lib Dems aren’t backing this progress or supporting the government as negotiations continue.”
Officials said formal negotiations on the SPS agreement could only begin once the EU’s 27 member states had agreed a negotiating mandate, and insisted the deal would support British jobs, help lower prices and strengthen trade with the UK’s largest agri-food partner.
The cost of Brexit to businesses remains substantial. Figures published earlier this year showed UK firms lost £37bn in the 12 months to last September, while total trade with the EU remains around 5 per cent below pre-Brexit levels.
Research by the Centre for Economic Performance at LSE found that about 16,400 businesses, roughly 14 per cent of UK exporters, stopped trading with the EU because of new post-Brexit rules, while many others never started. Increased bureaucracy has been a major factor, with Marks & Spencer previously revealing it had to rent an entire warehouse just to store export paperwork.
Negotiations on the SPS deal formally began in late November. Ministers believe an agreement could increase UK exports of major agricultural products to the EU by 16 per cent and lift imports from the bloc by 8 per cent. The government estimates that reduced red tape and compliance costs could save businesses up to £1m a month.
At present, exporters must pay for expensive certificates and checks, including Export Health Certificates that can cost up to £200 for every shipment of food crossing the border.
Naomi Smith, chief executive of pro-EU campaign group Best for Britain, said the economic consequences of Brexit were being felt “every single day”. She said: “The cost of living, sluggish economic growth and poor productivity in the UK are all compounded by our feeble trading relationship with the EU and its high time negotiators on both sides work faster to break this doom loop.”
Ministers insist progress is being made, but with businesses still facing heavy costs and delays, pressure is growing for the government to conclude the SPS deal and unlock what supporters say could be one of the most immediate economic wins of the Brexit reset.
