Economy November 26, 2025

Baby steps won’t fix Brexit or the Budget

Category
Economy

A few weeks ago, Brexit was a taboo word in Westminster. Now Keir Starmer and Rachel Reeves are telling us Brexit is why the government has had to raise taxes in today’s Budget.

The government is right. Brexit has left our economy in a mess.

Brexit made it much harder to trade with our European neighbours. That is costing us up to £240bn in wealth and £90bn in tax revenue every year, according to a recent study.

Without Brexit there would be more money to go around. Without Brexit people would wait less time for NHS treatment. Without Brexit our children’s classrooms would be better equipped.

It’s no use crying over spilt milk. We need radical action to repair the Brexit damage. Then, future budgets might put money into people’s pockets rather than taking it out.

Yet the government is taking only baby steps – and baby steps are not enough.

Credit where it is due. The government is working with the EU to try to get rid of some expensive Brexit red tape that is holding back food and energy businesses. As a result, those businesses may be able to cut prices, create more jobs and increase sales, so that they will also pay more in tax.

But it won’t be enough to pay for many MRI scanners or repair many crumbling school buildings. 

The current negotiations with the EU could add 0.3% to the UK economy, according to the government. But its own bean counters in the Office of Budget Responsibility say Brexit is costing us over 13 times that much! And many economists think the price tag for Brexit is even higher than that.

There is a way to get back a much bigger slice of the money Brexit has cost us. By getting the UK back into the EU single market. That would mean any business in, say, Birmingham could once again sell to customers in Barcelona or Berlin as easily as to customers in London or Edinburgh. Exactly as it could before Brexit.

Negotiating a return to the EU single market will take time. It will mean tough decisions. It will mean confronting the populist posturing of Nigel Farage and Reform. And it won’t solve all the UK’s problems. But we need to be in that single market if we want a future Chancellor to bring gladder tidings than Rachel Reeves has delivered today.

 

 

 

 


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