As the chancellor ekes out every last billion this week, it’s worth stepping back and remembering one key reason why Britain fares worse than its neighbours: Brexit. On Monday, MPs debated whether to rejoin the EU following the success of a public petition that gained 134,000 signatures. Don’t hold your breath. The government replied by quoting its not-until-hell-freezes-over manifesto pledge: “there will be no return to EU membership”. But the global Trumpquake has shaken all certainties, upended all that seemed solid. The European defence emergency has made talk of Brexit and its future less taboo on both sides of the Channel. Close observers note the ice breaking. “Things are moving in the right direction,” says Charles Grant of the Centre for European Reform (CER).
Nonetheless, Labour is so paralysed by Brexit that despite its hunt for growth, it has said nothing about the monumental sums that leaving the EU have cost the economy. Estimates vary, but the CER sets our losses at 5% of GDP. That’s a vast sum: 1% of Britain’s GDP is worth £25.6bn. Goldman Sachs’s calculations are similar. Researchers at the London School of Economics found that the UK lost £27bn in exports to the EU in the first two years; the Office for Budget Responsibility (OBR) reckons Britain has seen a 15% reduction in trade.
