Lammy says rejoining EU customs union could boost UK economy

Deputy Prime Minister David Lammy has suggested rejoining the European Union’s customs union could boost economic growth as ministers increasingly react to the financial damage caused by Brexit.

Mr Lammy refused to rule out a Brexit reversal seven times in an interview; He argued that leaving the EU would seriously damage the UK economy and said Labor should consider closer integration with Brussels.

The OBR estimates that leaving the EU would reduce productivity in the UK by 4 per cent in the long term.

Ahead of the budget, Chancellor Rachel Reeves said Brexit was having a bigger impact on the British economy than critics had predicted.

Mr Lammy said it was not currently government policy to rejoin the customs union but it was obvious other countries were seeing growth after doing so.

Labor must compensate for the “economic damage caused by Brexit”, Health Secretary Wes Streeting said on Wednesday.

Prime Minister Sir Keir Starmer’s chief economic advisor, Baroness Sefik, and some senior figures close to Number 10 are also reportedly pushing for closer relations with the EU.

Ms Reeves said in October: “Things like austerity, capital spending cuts and Brexit have had a greater impact on our economy than was anticipated at the time.

“That is why, in my view, we have been shamelessly rebuilding our relationship with the European Union to reduce some of the costs that have been unnecessarily added to businesses since 2016 and since we formally left a few years ago.”

Labour’s manifesto pledged not to rejoin the single market or customs union but pressure from MPs and advisers on the issue is mounting after weak growth forecasts.

Asked on the News Agencies podcast about the idea of ​​becoming part of the customs union again, Mr Lammy, who is also justice minister, said: “That’s not our policy at the moment. That’s not where we are at the moment.”

“But you can see that countries like Türkiye that have a customs union are apparently benefiting and seeing growth in their economies, and that’s also obvious.”

He added that his comments were “subject to shared responsibility”, implying he should follow Sir Keir’s position.

But Sir Keir’s principal secretary, Darren Jones, blasted Mr Lammy in the House of Commons, saying Labor’s policy would be announced in Parliament and not “on podcasts”.