\n Read more:<\/strong>\n<\/p>\n \n Supporters of some form of rapprochement with Europe point to most independent economic forecasts, including those by the Office for Budget Responsibility (OBR), that suggest any benefits of Brexit are significantly outweighed by its economic costs.\u00a0\n<\/p>\n \n OBR figures show a 4% fall in UK GDP and forecast a 15% drop in imports and exports over the long term due to leaving the EU. It also estimates that the UK\/EU Brexit agreement will reduce the UK\u2019s long-run productivity by 4%. While UK services trade has performed relatively strongly compared to international peers, OBR projections also point to a significant slowdown in our goods trade compared to the rest of the G7.\n<\/p>\n \n The OBR is not alone, although possibly more conservative, in its economic assessment of Brexit. Analysis by the US-based National Bureau of Economic Research (NBER) points to a 6% to 8% decline in the UK economy following our departure from the EU. The organisation has also published research indicating a 12% to 18% drop in post-Brexit investment in the UK and a 3% to 4% fall in productivity and employment since leaving the EU.\n<\/p>\n \n NBER studies show the UK\u2019s trade, as a share of its GDP, has fallen by 12% since 2019, significantly more than other G7 nations. Perhaps more worryingly, the bureau\u2019s long-term forecasts predict the UK economy could be 10.1% smaller by 2035 than if it had remained in the EU, a loss of more than \u00a3310bn.\n<\/p>\n \n Another argument for closer ties is around global uncertainty where there is a continuous threat of US tariffs being applied. Being aligned with a strong trading bloc, which includes the EU but also applies to like-minded economies like Canada, which can better withstand economic pressures from the US and China can help enhance UK economic security.\n<\/p>\n \n Promoting closer integration with the EU as a way of boosting jobs and the economy could therefore present a positive story for Starmer\u2019s administration and sit at the centre of its \u00a0growth strategy.\n<\/p>\n \n This is not a novel view as Starmer\u2019s government has been seeking closer ties with Europe since the week it came to power. In January, the Prime Minister once again made clear his intentions to further deepen links with Brussels saying the UK should consider \u201ceven closer alignment\u201d with the single market which is in the UK\u2019s \u201cnational interest\u201d with reported progress being made in some areas such as a UK\/EU youth mobility scheme.\n<\/p>\n \n \n However, the UK Government may favour a bolder, more radical approach. One such way is to consider entry into a customs union with the EU, a move that Starmer has so far rejected despite cabinet colleagues, including Wes Streeting and David Lammy as well as trade union figures, calling for such a move. One reason for the caution is that an effective customs union would necessarily involve closer integration with the EU regulatory framework, but it could provide economic advantages and serve as a way of rebuilding relationships with Europe.\n<\/p>\n \n The door appears to be open to the Prime Minister on this issue. Just last week the European Commissioner for finance, Valdis Dombrovskis, indicated that Brussels was “open\u2011minded” about discussing closer trade ties with the UK, including the possibility of a customs union.\n<\/p>\n \n Another way of boosting the economy could be a partial loosening of restrictions on EU workers to help bolster key industries, including the Scottish hospitality sector, which have been experiencing post-Brexit staff shortages.\n<\/p>\nStephen Phillips (Image: CMS)\n<\/p>\n