You have to credit Rachel Reeves for brass neck and chutzpah if nothing else. Going to the EU and talking about “unnecessary barriers” to trade takes a bit of nerve for any Briton in these post-Brexit times, but for the chancellor of the exchequer, it verges on the risible. Being lectured about the folly of unnecessary barriers and the benefits of free trade must have tested the patience of her audience of EU finance ministers in Brussels. Bad as that is, Ms Reeves isn’t even offering to eliminate Britain’s self-imposed barriers but merely to reduce them by a few millimetres, the effect of which on our economy would be almost negligible even in the long term. It is really incomprehensible to me.
With recent polling putting Reform UK in second place just behind the Tories with Labour a close third on 23% and senior Conservatives starting to jump ship to join Farage’s mob it should be obvious to her that when the two right-wing parties merge, as they surely will, Labour’s huge majority will disappear as quickly as it arrived.
Reeves and Starmer simply don't have the luxury of time.
Her speech was probably counterproductive anyway, almost calculated to upset the very people we are supposed to negotiate a ‘reset’ with next year. We have made a terrible mistake she seemed to be acknowledging. But rather than admitting it openly and beginning the process of reversing Brexit, the chancellor is asking for most of the frictionless trade benefits of membership without all the obligations and costs. In other words, to be in a better position after Brexit than we were before!
The chancellor said she believed "it would be a profound mistake to believe that we are stronger alone."
And in a lot of warm. waffly words she said that "deeper trade between allies" was at the heart of economic competitiveness, adding:
"I believe that a closer economic relationship between the UK and the EU is about improving both our growth prospects. It is not a zero sum game.
"In the long-run, Brexit is expected to cause UK trade intensity to fall by 15% and with goods exports between both the UK and EU continuing to remain below 2018 levels, this is impacting UK and EU economies alike.
"I know from speaking to business that they want to see trade barriers reduced. And so, the reset in relations is about doing what is in the best interests of our shared economies. Breaking down barriers to trade.
"Creating opportunities to invest. Expanding choice to consumers. And helping our businesses to sell in each other’s markets because it is business that is at the beating heart of our potential to grow and the beating heart of our competitiveness and economic success.
"That’s why I’m here today; that’s what our reset seeks to achieve."
After reading her words, I went back to Lord Cockfield’s 1985 White Paper setting out all the reasons to get on with creating the EU single market to see if I could find any references to ‘unnecessary barriers.’ Sadly there are none. But the introduction begins:
“Unifying this market (of 320 million) presupposes that members will agree on the abolition of barriers of all kinds, harmonisation of all rules, approximation of legislation and tax structures, strengthening of monetary cooperation and the necessary flanking measures to encourage European firms to work together. It is a goal that is well within our reach provided we draw lessons from the setbacks and delays of the past. The Commission will be asking the European Council to pledge itself to completion of a fully unified internal market by 1992 and to approve the necessary programme together with a realistic and binding timetable."
These were the words that the Commission had used to define its own task of 'abolishing barriers of all kinds' and in which Britain and Margaret Thatcher played a leading role. It was to eliminate all the physical, technical and fiscal barriers that the White Paper covered explicitly and it was a stunning success.
Brexit has now wantonly re-erected every one of the barriers that existed in 1972 in an act of sheer insanity. Cockfield who died in 2007 would be turning in his grave.
But having done so, imagine what it must be like inside the EU Commission to hear British leaders coming over to mainland Europe with a request to begin talks about ditching "unnecessary barriers." The short answer is that none of them are 'unnecessary.' Brexit and only Brexit made them necessary. It must be absolutely frustrating if not maddening. I'm surprised how diplomatic they were.
The crazy thing is that Labour will attract an awful lot of criticism from the usual quarters even for their incredibly unambitious plans but the rewards in terms of growth (assuming they get what they want) are virtually negligible as this chart from John Springford at the Centre for European Reform (CER) makes clear.
In a new CER insight @johnspringford.bsky.social provides some rough-and-ready calculations of the economic benefits of the ‘Brexit reset’. Read here: https://buff.ly/3ZJ4Zdp— Centre for European Reform (@centreeuropeanref.bsky.social) 10 December 2024 at 09:00
The tiny improvements to Britain's GDP are in the long-term, well after Reeves and Starmer will be gone, the need for sparking economic growth through trade is now, not in 10 years.
The biggest boost to GDP in a decades time would be from a Youth Mobility Scheme - but the government is adamantly opposed to that!!! This is a key EU request.
Ms Reeves told reporters that: “the deal the previous government secured post-Brexit was not the best one for our country and indeed has reduced trade flows not just from the UK to the European Union but also from businesses based in the European Union into the UK”.
“And so there is a shared objective and a shared challenge to improve those trade and investment flows,” she said.
We all know that. We all know too what the answer is. She knows it, the EU finance ministers know it, the Labour party knows it and the majority of people in this country know it. The only man standing in the way is Kier Starmer and in his heart, he knows it too. The election of the unpredictable Trump in the USA has made the choice even clearer
Reversing Brexit is inevitable. The sooner Starmer realises that, the better.
