Fury at Rachel Reeves’ Brexit reversal as she calls for the UK to follow EU rules again

Rachel Reeves was accused of trying to reverse Brexit after calling on the UK to reimpose some of the Brussels rules on Tuesday.

In a major speech, the Chancellor described closer alignment with European Union regulations as ‘the right way forward for our country’.

He also claimed Britain’s departure from the EU had caused “profound damage” to the economy, citing controversial research that the “blow” was equivalent to 8 per cent of GDP.

But critics on Tuesday said complying with EU regulations meant giving up the control voters demanded in a 2016 referendum.

Reform UK’s Robert Jenrick said: ‘We must take full advantage of Brexit, for example by removing VAT on energy bills to reduce people’s bills.

‘Instead, Reeves is desperate to cede control and leave our economy at the mercy of Brussels.’

Former minister Sir Simon Clarke, who is now chairman of the Onward think tank, said: ‘Labour has promised to respect Brexit, but with less than two years to go into government the Chancellor is betraying the purpose of leave by accepting rule-taking status in many sectors.’

Shanker Singham, chairman of the Growth Commission think tank, said: ‘The introduction into UK law of any regulation that costs EU economies dearly would be an act of colossal self-harm.’

Delivering the Mais Lecture at Bayes Business School in the City of London, the Chancellor claimed that ‘Brexit has caused profound damage’, raising costs for businesses and prices for shoppers, as well as shrinking markets for exporters.

He cited ‘independent studies’ showing ‘the GDP impact could be as high as 8 per cent’.

A recent paper from the National Bureau of Economic Research, a US think tank, predicted that by 2025 ‘GDP per capita in the UK will be 6-8 per cent lower than it would have been without Brexit’.

But economist Julian Jessop said this figure was flawed because it was arrived at “by comparing UK growth since 2016 with mismatched groups of other countries and assuming any shortfall could only be due to Brexit”.

‘Where it is in our national interest to comply with EU legislation we must be prepared to do so,’ Ms Reeves said.

Under the new National Interest Principles, compliance will occur if it enhances growth and protects national security.

He did not list the areas where compliance with EU legislation would need to be ensured, but stated that this would cover most sectors.

Ms Reeves insisted: ‘I firmly believe that closer alignment is the right path for our country, a path chosen as a sovereign nation, a path chosen in our national interest.’

He added: ‘We will not rejoin the single market and customs union or restore free movement of labour.’

It comes as MPs and MPs on the UK-EU Association Council called on both sides to ‘significantly increase the level of commitment to a common agenda’.

They specifically called on the UK and the EU to ‘develop structured frameworks for EU-UK defense industry cooperation’.

In his speech, the Chancellor acknowledged the uncertainty caused by the war in the Middle East, saying: ‘I know this is a worrying moment.’

But he rejected suggestions that Britain could push ahead with the target of increasing defense spending to 3 per cent, for which the Daily Mail has campaigned.