In a significant critique of Brexit’s economic consequences, Treasury Minister Tulip Siddiq has highlighted that 60 per cent of its impact has yet to be felt.
Addressing concerns based on projections from the Office for Budget Responsibility (OBR), Siddiq noted that the UK’s economy is expected to contract by 4 per cent in the long run as a direct result of leaving the European Union.
She also pointed out that trade figures—both imports and exports—are projected to remain 15 per cent lower than they would have been if Britain had stayed in the EU.
This marks the first time the government has quantified how much of Brexit’s economic effects have already unfolded. Siddiq referred to further OBR data showing that only 40 per cent of the total impact has been realised thus far.
Critics argue that this stark forecast should prompt ministers to reconsider their post-Brexit strategies, as Labour leader Sir Keir Starmer looks to reset relations with EU counterparts. Naomi Smith, Chief Executive of Best for Britain, called on the prime minister to strengthen ties with the EU to “restore prosperity and mitigate further Brexit-related damage.”
Stella Creasy, Chair of the Labour Movement for Europe, emphasised that the next 18 months are crucial for addressing issues such as trade barriers, work visa challenges, and regulatory burdens hampering British businesses.
“Brexit cannot be fully ‘fixed’, but with political will, many of the problems it has created can be mitigated. This demonstrates the urgency of addressing them as soon as possible,” Creasy said.
The warnings come amid recent revelations by The Independent that Britain has so far paid £23.8bn to Brussels to fulfil its financial commitments post-Brexit, with another £6.4bn still due.
Ahead of the 2016 referendum, Vote Leave advocates claimed that Brexit would bolster British trade.
However, the OBR has indicated that “weak growth in imports and exports over the medium term” is a result of Brexit and is expected to reduce the trade intensity of the UK economy by 15 per cent in the long term.
Responding to a parliamentary query from SNP’s Stephen Gethins, Siddiq remarked that it was difficult to isolate the specific impact of exiting the EU’s customs union and single market from broader global disruptions, including the COVID-19 pandemic, supply chain issues, and Russia’s invasion of Ukraine.
Stuart Coster, founder of the pro-Brexit Democracy Movement, countered by noting that the UK’s economic growth has outpaced some European economies, indicating Brexit’s potential benefits. He claimed that these advantages have contributed billions to the Treasury.
Meanwhile, economist and former MEP Molly Scott Cato, Vice-President of European Movement UK, argued that Labour’s aspirations for economic growth are incompatible with remaining outside the EU.
“How can the UK economy compete against the low costs of China, America’s vast Inflation Reduction Act subsidies, and the EU’s frictionless borders?” she questioned.
A government spokesperson reaffirmed their commitment to making Brexit a success: “This government is focused on looking ahead and making Brexit work for the British people. We aim to enhance our trade and investment ties with the EU and reduce unnecessary barriers, while maintaining that there will be no return to the single market, customs union, or freedom of movement.”
