We knew Brexit would be bad for the economy, but not this bad. The evidence and public opinion are now aligning on a consensus to, at least, rejoin the customs union and single market. One way or another, this will become a major dividing line between parties at the next election, but the big unknown is which side of that line Labour will commit to.
We know now Brexit has been detrimental
At the time of the Brexit referendum in 2016, it was predicted by professional and academic economists, as summarised by the IMF, that Brexit would cost the UK around 4% of GDP in the long term. It turns out that was an underestimate. New research by the highly respected National Bureau of Economic Research found the true impact of Brexit is that UK GDP is actually between 6% and 8% lower than it could have been. To put that in context, UK GDP is currently estimated to be around £3.14tn so, without Brexit, our GDP could be between £188bn to £251bn bigger. For an economy like ours with huge debt, failing public services, rising cost of living, high energy costs, and low growth, that addition to our GDP would be hugely beneficial.
Just in terms of tax revenues, this new analysis combined with House of Commons Library research, shows we are £90bn a year worse off. This means we, as average Britons, are between £2,700 and £3,700 of GDP per head worse off than before. Just in case you are in the Michael Gove school of “… people in this country have had enough of experts,” this new research is of the highest quality, authored by university academics and bankers from Deutsche Bundesbank and the Bank of England. If in doubt, read the research and if you are still not convinced, just look around and ask if you can find one thing that Brexit has improved for you.
There’s a solution to many of the UK’s problems
These figures, showing how financially damaging Brexit has truly been, are so high that they cannot be ignored at the next general election. When political parties are struggling to explain how they will fill the holes in our economy while delivering acceptable levels of public services, the prospect of a £90bn+ bonus every year is surely too appealing for it not to appear in someone’s manifesto. To turn some or all of that £90bn into reality, the UK would probably have to join the EU’s single market and possibly a customs union, but not necessarily become full members of the EU.
The Scottish National Party is strongly in favour of EU membership, albeit as an independent nation. Sinn Féin still refuses to take their seats in Westminster so have made themselves irrelevant in this respect. The Democratic Unionist Party campaigned for Brexit but doesn’t like the way it was implemented. It is more concerned with removing trade barriers with the UK mainland than moving closer to Europe. Plaid Cymru views Brexit as a failure and wants to join the single market and customs union “… as soon as practical” and to re-join the EU “… at an appropriate point in time, recognising the failure of Brexit.”
Two sides of a Westminster tug of war
For the Liberal Democrats, rejoining is not a problem; in fact it’s their current official policy. Liberal Democrat Leader Ed Davey said of Brexit: “The most dishonest campaign in our history said it would save us £350mn a week, but Brexit actually cost us £250mn a day in 2025.” Meanwhile, the Green Party have already pledged to rejoin the EU Customs Union and rejoin the EU “…as soon as the political will is present.” So, if anything, they are even more committed to Europe than the Liberal Democrats.
But what of other major Westminster parties? Reform UK Ltd are the ‘Brexit party’ with their leader Nigel Farage, ‘Mr Brexit’, largely responsible for the decades’ long campaign to leave the EU. For them to consider moving the UK closer to Europe would be an anathema and an admission that their Brexit experiment had been a complete disaster for the country – which it is. Clearly, they will fight tooth and nail to prevent the UK moving closer to Europe in any way. The Conservatives made Brexit happen and turned it into the hardest possible Brexit under Boris Johnson. Their official policy, under Kemi Badenoch’s leadership, is to put Britain’s national interest first, and strengthen our sovereignty to: “Reject Labour’s Brexit capitulation that would turn Britain back into a rule-taker from Brussels.” So, they’re not going to allow a possible £90bn benefit to stand in the way of dogma.
And the government’s position is?
Labour, the party of government, with 401 of the 650 seats in the House of Commons, have been shockingly silent on Brexit. The 2024 Labour manifesto was clear: “With Labour, Britain will stay outside of the EU. But to seize the opportunities ahead, we must make Brexit work. We will reset the relationship and seek to deepen ties with our European friends, neighbours and allies. That does not mean reopening the divisions of the past. There will be no return to the single market, the customs union, or freedom of movement.”
Labour have stuck to that policy until very recently when, in October 2025, Chancellor Rachel Reeves, said, “There is no doubting that the impact of Brexit is severe and long-lasting” and Health Secretary Wes Streeting said, “I’m glad that Brexit is a problem whose name we now dare speak.” Hardly a battle cry for rejoining the EU, but nevertheless a marked change in approach by Labour. Public opinion has also continued to shift against Brexit with 60% of people now supporting EU membership for the UK. Combined with a potential £90bn per year benefit to the economy it will be very hard for Labour, or any party for that matter, to resist the growing pressure to move closer to Europe.
Does Labour have the strength to do the right thing?
Jeremy Corbyn (leader of the Labour Party during the Brexit referendum) famously said that his passion for remaining in the EU rates at about “seven, or seven and a half” out of 10. Therefore, it is not surprising that despite Labour eventually coming out in favour of Remain, during the referendum campaign Labour was “almost invisible”. Keir Starmer, on the other hand, supported Remain and campaigned for a second referendum. Since Labour took power under Starmer’s leadership, its position on Europe has been to try and improve the Brexit deal, but not to join the single market or customs union. This is in spite of around 74% of Labour voters saying they would now vote to rejoin the EU.One of the biggest problems for Labour is the lack of growth in the economy now coupled with a lack of funds to generate growth, so an opportunity to increase GDP by £90bn per year would seem too good to miss. Joining the customs union and single market would have the support of most Labour voters and more than half of the general population, particularly young people. So, for Labour, joining the customs union and single market would be a winning proposition at the next election. The real question is: does Labour have the political will and communication skills to lay the groundwork and create a compelling, truly pro-EU manifesto for the next election? Time will tell…
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