BREXIT is continuing to have a “devastating” effect on the UK’s trade as a new report forecasts a long-term decrease in the economy due to leaving the EU.
Chancellor Rachel Reeves delivered her first UK Budget, and Labour's first Budget in 14 years, on Wednesday and outlined that the tax burden will reach a historic high.
Prior to the Budget’s announcement, Labour said a £40 billion funding gap needed to be plugged, by raising employer National Insurance contributions, efficiency savings within government, and growing the economy.
However, the Office of Budget Responsibility (OBR) said it was already clear that Brexit and the UK's status outside the single market is costing the UK economy billions of pounds every year.
In a report released on the same day as the UK Budget, the OBR said: “Weak growth in imports and exports over the medium term partly reflect the continuing impact of Brexit, which we expect to reduce the overall trade intensity of the UK economy by 15 per cent in the long term.”
The referendum to leave the European Union was held in 2016 but the UK didn’t formally leave until 2020.
During the referendum vote Leave campaigners argued that British trade would receive a boost from exiting the European Union.
However, It was reported at the start of 2024 that Brexit has already cost the UK economy around £140bn.
SNP MP Stephen Gethins (below) said: “At a time when the chancellor is talking about deficits the OBR is releasing figures illustrating the appalling impact of Brexit. It has been devastating for our businesses, public sector and overall economy.
“Reversing, rather than embracing, a hard Tory Brexit, is the single biggest action the chancellor could take today to boost growth and the Treasury’s finances.”
The Labour Government has specifically ruled out any return to the EU’s customs union or single market, despite growing warnings over the cost of Brexit to the UK economy.
Dr Mike Galsworthy, chair of the European Movement UK, a cross-party organisation campaigning on the benefits of close ties between the UK and EU, said Brexit has been the “elephant-in-the-room for far too long”.
He said: "These latest figures from the independent OBR on UK trade are just the latest confirmation of what we already knew. Brexit does not work for working people. It can't be made to work, and can't be forced to work.
“Red-tape is having a crippling impact on our economy, especially UK businesses with supply chains that depend on the EU. The government must capitalise on their reset of our relationship with Europe and deliver long-term stability for UK businesses.
“Brexit has been the elephant-in-the-room for far too long. It is now reckless to ignore the severe damage that continues to be done to the public finances. It has long been draining the financial and social wellbeing of every single one of us - and yet completely ignored as if it does not exist.
“This absurd situation has to end. We must now have a forward-facing public inquiry into the true cost of leaving the European Union and the possibilities for repairing the scandalous destruction that has been done.”
