Keir Starmer’s ‘Brexit Is Bad, Let’s Make It a Bit Worse’ Strategy

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It’s taken a long time but Keir Starmer’s Government has finally admitted that Brexit has been a disaster for the UK.

“There is no doubt that the impact of Brexit has been severe and long-lasting”, Rachel Reeves told Sky News, in her first big admission that leaving the EU has badly hit the UK economy.

This admission has been a long time coming. For years Labour’s strategy has been to suggest that they could seize the “opportunities” of leaving the EU in order to “Make Brexit Work”.

Yet with polls showing support for Brexit at all time lows, and support for “Mr Brexit” Nigel Farage at all time highs, Downing Street have decided to start linking the two.

The strategy has a double purpose. Not only do they hope that it will put the blame for the UK’s faltering economy onto Farage, but they also hope that it will help pave the way for the tax rises that Reeves today explicitly stated will have to be introduced at her upcoming budget.

There are two big problems with this strategy. The first is that it is unclear how effective trying to blame a man for the UK’s current economic stagnation, who has never been in Government before, rather than the two parties who were in charge of the country both before leaving the EU and since, will be. If Brexit is to blame for the economy then so are the two parties who voted it through and keep it in place.

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Peter Jukes

The second and bigger problem is that if Brexit has been such a disaster, which it has, then why is Keir Starmer’s Government still so intent on continuing with it?

Since entering government the Prime Minister has repeatedly insisted that the UK will never rejoin the EU in his lifetime, while also ruling out any return to the European Customs Union or Single Market either.

There have been some slight but welcome tweaks to the UK’s trading and regulatory relationship with the EU, with the overall trend under Starmer being a gradual shift towards a more pro-European and internationalist position. Reeves’ comments today are undoubtedly a part of that shift.

Yet when it comes to making the sort of significant move back towards the EU that would actually make a meaningful difference to Britain’s stagnant economy, Starmer remains firmly stuck in the Brexit mud.

Making Brexit Worse

This is particularly the case when you look at why Brexit has been such a disaster for the UK economy. On this the evidence is clear. By shutting off the UK from its main economic partners in Europe, Brexit put the breaks on British trade, while shifting the costs for this additional friction onto UK consumers. Most experts agree that one of the main reasons inflation remains so stubbornly high in the UK compared to most other European nations is because of the additional trade and Labour costs associated with being outside the EU.

The fall in the pound that followed Brexit, combined with the impact of depriving British companies of a skilled and relatively cheap European workforce, means that inflation in the UK is now significantly higher than it otherwise would have been. The result is that even now when forecasts suggest stronger economic growth in the UK in the years to come, most voters will continue to feel worse off because of ever-spiralling prices. The political beneficiary of this will inevitably be the same Reform UK leader the Government is now belatedly trying to shoulder with the blame for it.

Of course the obvious solution to this problem would be to remove those inflationary barriers, either through reversing Brexit altogether, or through negotiating re-entry into the Single Market and Customs Union, while relaxing restrictions on Europeans coming to live and work in the UK and vice versa. By doing so Starmer’s Government would not only give a much-needed boost to the economy, but also help Britain’s faltering public services too.

It is overwhelmingly clear that this is not a strategy likely to be adopted by Starner however. Indeed, far from removing such frictions, the Prime Minister instead seems intent on ramping them up further. Just this week his new Home Secretary announced plans to make it even harder for migrants to live and work in the UK, with all new arrivals being required to demonstrate A Level standards of English.

The incoherence of this announcement, coming as it does in the same week that the Government insisted it would “Get Britain Building” again, is startling. Trying to build our way out of economic stagnation while at the same time making it even harder for construction companies to hire the workforce required to do the actual building, is a recipe for failure so obvious it should be visible from the other side of the English Channel.

Far from “Making Brexit Work” the Government’s strategy appears to be to “Make Brexit Worse”.

Reeves’ comments today are certainly welcome in that they clearly acknowledge the reality of Brexit for the first time. However, now that they have finally started to acknowledge the problem, they must also start to taking the obvious steps required to solve it.

The first of those steps is to stop making matters worse. That means abandoning its race to keep up with the economy-sapping immigration policies of the man who brought us Brexit in the first place. Until the Government takes that step, the “severe and long-lasting” impact of leaving the EU, identified by the Chancellor today, will just keep on getting worse.