Keir Starmer is being urged by senior Labour figures and business leaders to seek to rejoin the European Union as a bold move to boost the economy and revive his premiership.
Writing in The Observer, the former Labour leader Neil Kinnock says Brexit has “inflicted serious harm” on the UK and the government should aim to reverse it, adding that Labour should include a commitment to rejoin in its next election manifesto or hold a referendum to secure a “democratic mandate” for going back in.
The intervention, a decade after the UK voted to leave, was supported by business leaders, who urged Starmer to be more ambitious in his efforts to rebuild the relationship.
Paul Drechsler, former president of the Confederation of British Industry (CBI), said: “The cost of the UK’s exit from the EU, and the material economic harm which followed, is measured not just in sluggish GDP, rising trade barriers and growth at a standstill, but incalculable costs to opportunities, innovation and investment. Membership of the biggest global free trade area was always – and remains – a vital ingredient of the UK’s future economic security and prosperity.”
Dani Loughran, managing director of Aston Chemicals, said: “It’s long past time to have a grown-up conversation about the UK’s membership of the EU and the vast improvements it would bring to jobs, growth and the public finances – benefiting the working people of this country.”
Deborah Annetts, chief executive of the Independent Society of Musicians, said Brexit had been “devastating” for touring musicians and artists. “I know how desperate they are for greater cultural exchange and many would welcome the debate about EU membership.”
The idea of rejoining has been taboo since the 2016 referendum but Donald Trump’s tariffs and threats to Nato have put it on the agenda at Westminster. Last week, Philip Rycroft, the former civil servant who ran the Brexit department, said the “argument was there to be won” about rejoining the EU. “No one can credibly claim that we have marched to the sunny uplands of sustained economic growth as a consequence of Brexit,” he said.
The government has embarked on a “reset” of UK relations with the EU and has promised to align more closely in certain sectors. Labour pledged in its last election manifesto not to sign up to the single market or customs union, and strategists fear being punished at the polls if the party now advocates rejoining.
“Nigel Farage would be delighted at the prospect of the next general election being a de facto second referendum,” one source said. “The public don’t want to relitigate these arguments. We need to make Brexit work – not fall into the comfort blanket of ideology or identity over what is pragmatic and deliverable.”
But others argue that rejoining the EU would be the best way to improve economic growth and see off the threat from the Green party. Asked by The Observer last year whether he wanted to rejoin the EU, the Green leader Zack Polanski replied: “Yes”.
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In February, the London mayor, Sadiq Khan, told The Observer: “Brexit was the biggest act of economic self-harm any country’s ever done. My ultimate goal is for us to rejoin, and I think it will happen in my lifetime.”
A recent YouGov poll found that 53% of voters now support rejoining the EU and only 32% oppose it. More than 80 per cent of Labour, Green and Liberal Democrat voters want to reverse Brexit. One study, cited by chancellor Rachel Reeves in her Mais Lecture last month, estimated a cumulative hit to GDP of between 6% and 8%, compared with a world where Remain had won the referendum.
Closer ties to the EU could recover some of that loss. Recently agreed deals on energy and food safety rules are expected to boost GDP by 0.3% by 2040. New agreements in areas such as youth mobility could provide modest benefits, as could further sector-specific alignment. But the government’s own 2018 analysis showed the biggest economic costs of Brexit related to leaving the customs union and, especially, the single market.
Rejoining either would mean jettisoning the government’s “red lines”. Economists also warn that it would not undo all the damage. Much of the hit came from heightened uncertainty in the post-referendum period, which led to reduced investment as businesses waited for clarity on trading arrangements, and from the time and resources firms spent in preparing.
And while a shift closer to Europe is likely to be economically beneficial overall, it would also bring costs. Joining a customs union would mean tearing up recently agreed trade deals with the rest of the world.
Joining the single market would require the UK to be a regulatory rule-taker, including in areas such as financial services and AI, and would require revisiting the question of free movement. The re-entry terms would almost certainly include a demand for higher budgetary contributions, and potentially a path towards adopting the euro.
Photograph by Daniel Leal/AFP via Getty Images, Kenzo Tribouillard/AFP via Getty Images