Today’s Spring Statement demonstrates just how much the UK’s finances are struggling. Yet the biggest drain on Britain’s budget did not even get a mention. Most economists estimate that leaving the EU has cost the United Kingdom around 5% of its GDP.
That’s a staggering £140 billion.
Yet the Chancellor again refused to even acknowledge the elephant in the room.
Labour is stuck between a Brexit rock, and an austerity hard place. Between now and the UK-EU summit on 19 May we need a truly ambitious plan for how the reset with the EU can help avoid more days like this.
Mark English, Head of Policy, European Movement UK, said:
“Reducing red tape in food trade with the EU will make life easier and cheaper for farmers, food manufacturers, supermarkets and the hospitality sector – and for all of us as their customers. A defence and security partnership with the EU will not only help protect us from Putin and from Donald Trump’s threats to abandon NATO, it would also open the way for British industry to win more contracts, as the EU ramps up defence spending. That means creating jobs.
“And a youth mobility deal with the EU would above all mean restoring opportunities that Brexit stole from our young people, to get experience of living, studying and working in Europe. But it would also help our economy by improving our young people’s skills and by allowing talented young people from the EU to come to the UK and contribute.”
The Centre for European Reform has calculated that an ambitious reset could over time boost UK GDP by 0.3 to 0.7%. That’s worth having, and could be used to restore some of the protections that vulnerable people are losing today.
Sir Nick Harvey, CEO, European Movement UK, said:
“The reset needs to be a starter, not the main course. We at European Movement UK want a Chancellor to be able to stand in the Commons in a few years’ time, not needing to make people poorer, but able to cut taxes, reduce debt and boost spending. That can only happen if we get the UK back into Europe’s border-free market.
“Labour’s ‘red lines’ on its relationship reset with the European Union, including no return to the Single Market or the EU Customs Union, must now be revisited and revised. The reasons why will not have escaped the Chancellor’s notice, even if she does not want to look in their direction.”
Facts and figures
- Brexit is on course to cut UK trade intensity by 15%, the government’s independent financial watchdog has warned. (Source: OBR)
- Brexit has cut the UK economy by £140 billion, while London’s economy has lost more than £30 billion. The same report suggests the UK will be more than £300 billion worse off by 2035. (Source: Cambridge Econometrics)
- The CER uses a similar estimate, putting the economic loss at 5% of UK GDP, or around £130 billion. (Source: CER)
- The average Briton was nearly £2,000 worse off in 2023, while the average Londoner was nearly £3,400 worse off. (Source: Cambridge Econometrics)
This article is based on a media release from EMUK
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