Outrage as Rachel Reeves’ Brexit betrayal ‘to cost UK £40bn a year’ | Politics | News
Rachel Reeves’ insistence that closer ties with the European Union are Britain’s “greatest reward” is a clear Brexit betrayal that will cost the UK economy up to £40bn a year, a leading think tank has warned. Sir Keir Starmer’s accelerating drive towards Brussels is “fatally flawed” and will cause lasting harm to growth, trade and sovereignty, the Prosperity Institute said.
The institute says re-entering the customs union, a move openly supported by some senior Labor figures including David Lammy and Wes Streeting, would reduce GDP by 0.5% in the first year, escalating to a slump of 1.35% in the fifth year, equivalent to a loss of output of £30-40bn a year. Economist Fred de Fossard said: “British businesses have seen growth since leaving the EU. While some people say reducing trade barriers with Europe makes rejoining the EU worthwhile, the data does not bear this out.”
“The EU economy is in decline, demand for goods is much lower than in the past, its industrial base is eroding and the bloc is no longer the economic power it once was.
“British businesses will be locked into this decline and shackled to a captive market. That’s what the EU wants and we shouldn’t give it to them.”
The Institute’s report warns that deeper alignment would increase trade barriers with the US and faster-growing markets in the Indo-Pacific, erode Britain’s independent trade policy (which has already secured over 70 deals worth £164bn) and subject the UK to higher regulatory costs.
Harmonization will reportedly increase AI costs by imposing a 57.5% increase in carbon charges across data centers Telegram.
It also carries the risk of provocation Donald Trump and undermining a trade deal with the world’s largest economy. The US president has repeatedly attacked the EU’s slow growth and bureaucracy.
Britain has already paid the heavy price for last year’s “restart” agreement. In exchange for complying with EU phytosanitary rules, the UK gave up 12 years of access to fishing waters.
Farmers warn the changes will harm farming and impose tougher standards on British food production. Dozens of pesticides and herbicides permitted in the UK have been banned in Europe.
The Labor Party’s decision to rejoin the Erasmus Plus program has also come under criticism. The institute said: “This would force Britain to issue visas to tens of thousands of EU residents and spend taxpayers’ money subsidizing European universities, with little benefit to taxpayers, students or researchers.”
The findings reveal the gap between Labour’s rhetoric and actions. The 2024 manifesto ruled out rejoining the customs union. In December Sir Keir insisted: “This is not our policy at the moment.”
But a few weeks later he was proposing greater alignment, while 13 Labor MPs backed a Liberal Democrat bill to begin negotiations on a special customs union.
A Government spokesman said: “We are focused on delivering deals that could contribute up to £9bn a year to the UK economy, supporting manufacturers and businesses, supporting jobs and putting more money in people’s pockets right across the country.
“Our new strategic partnership with the EU is in our national interests. Good for bills, good for our borders and good for jobs, without compromising our red lines – no return to the customs union, no return to freedom of movement and no rejoining the single market.”
