Speaking of last week’s much-publicised Brexit “reset”, Sir Keir Starmer proclaimed: “It gives us unprecedented access to the European Union market.” Sorry, prime minister, but, with the utmost possible respect, I have to say that it doesn’t.
We enjoyed unprecedented access to the EU market when we joined what was then the European Economic Community (EEC) in 1973. And we had even more unprecedented access when we signed up with others to the European single market in 1986.
Our membership, indeed championing, of the single market, negotiated on behalf of Mrs Thatcher, by my old friend the late Lord Cockfield, was regarded by Ken Clarke as Mrs Thatcher’s greatest achievement.
Ken didn’t say this, but I shall: it gave British industry a trading opportunity to counterbalance some of the damage wreaked by Thatcher’s adoption of monetarism and its excessively deflationary policies in the early 1980s.
However, this did not stop soi-disant Thatcherites from turning to the Brexit which involved abandoning our precious membership of the single market. At which stage, I should point out to you that the egregious Farage, whose absurd Reform P UK party so terrifies Starmer and his adviser Morgan McSweeney, is an arriviste Before the word Brexit was coined – by former Labour minister for Europe Denis MacShane – one Jimmy Goldsmith set up the Referendum party in 1994. Goldsmith was not all bad. While wanting to leave the EU, he at least did not wish to leave the single market. (He also had the good taste to want to buy The Observer, but failed!)
Which brings us to The Great Betrayal, and the outcry from Farage, Reform and the right-wing press that this minor “reset” of our relations with the EU is throwing away the “freedoms” of Brexit.
Let’s face it: as most of the country now recognises, it was Brexit, and the lies that accompanied it, that was the great betrayal. Instead of running scared of Farage, Labour should be hammering home that it was – and is – Farage’s Brexit which has aggravated so many of the discontents in this country that began with the economically and socially damaging austerity programme of 2010 onwards.
The Centre for European Reform finds that, since Brexit and the pandemic, UK trade performance has fallen way behind the G7 and EU average
Alas, as a recent article in the New Statesman observes: “George Osborne’s austerity doctrine still rules Britain’s economy.” So, if I may add, does Brexit.
As I have pointed out before, the damage caused by Brexit’s impact on our output and trade has inflicted a £40bn-plus hole in annual government tax revenue – a hole which is largely the explanation for the problems my (almost ) friend Rachel Reeves has been having with the budgetary finances, and her ill-chosen way of filling it.
Last week’s “reset” is generally considered to be more important for its strategic and defence implications than its economic ones. The government’s estimate of a £9bn-a-year annual boost to the economy by 2040 takes into account the recent Indian and US trade deals, plus the relaxation of certain Brexit restrictions under the “reset”. This is chicken feed by comparison with the annual £7.5bn plus we received from the European Investment Bank during the last year of our EU membership – a figure that was multiplied two or three times by the private sector investment it stimulated, and which, broadly speaking, we received every year.
The Office for Budget Responsibility will no doubt give its own estimate at Budget time of the impact of the trade deals, but it is unlikely to be very different from the £9bn figure from the government last week. A recent Stanford University study puts the loss of output from Brexit even higher than the widely quoted 4% a year from the OBR.
The Centre for European Reform finds that, since Brexit and the pandemic, UK trade performance has fallen way behind the G7 and EU average. This surely strengthens the case for the government to regard last week’s tentative but welcome easing of Brexit-induced bureaucratic restrictions on trade with, and travel to the EU, as merely the first step towards re-entry to the customs union and single market. This is vital for it to realise its growth ambitions. So, as called for by Lord Kinnock, is the need for “a national security levy to fund defence bonds” in a world where we can no longer rely on the postwar consensus of US support for European defence.
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