Slumping GDP, falling foreign investment, job losses: British economy more cannot recover from Brexit. Could London reconsider its decision on Brexit under a new Labor government?
New British Prime Minister Keir Starmer, a supporter of Britain's exit from the EU, has been silent for most of his election campaign on the question of whether he intends to review the Brexit decision taken in a referendum in 2016. In the end, however, he ruled out such a possibility.
It is widely believed that Starmer avoided discussions about the consequences of Brexit in order to get the votes of Conservative voters irritated by the Tories over the series of crises. Long queues for basic medical services and high prices are at the top of this list.
Without the EU it will be more difficult
Labour's victory came despite little information on how Starmer intends to deliver on his campaign promises - to achieve sustainable growth and save the British economy, which is still reeling from the negative effects of Brexit. But as the London economist Dimitrii Zengelis points out to DV, it will be much more difficult for the new prime minister to achieve this if the United Kingdom remains outside the EU and its single market.
Mike Galsworthy, chairman of Britain's European Movement, which is for improving ties with the EU, also believes Starmer avoided the topic so as not to hurt Labour's chances. But Galsworthy predicted that pressure from business, prominent economists and those who voted against London's exit from the EU could eventually push him to tackle the issue.
Labour may have drawn "red lines", suggests Galsworthy, talking about the outright rejection of the country's entry into the EU's single market. But he is convinced that various public groups will put pressure on these lines as people demand answers and a rise in living standards.
Will Starmer be made to reconsider the Brexit decision?
Many assume that rapprochement with the EU will be necessary for Great Britain to improve the situation of the British economy. While there are differing estimates of the extent of the damage done to it by Brexit, all agree that it has led to increased red tape and increased costs for British businesses. In addition, the volume of trade between London and its largest partner - the EU - has decreased.
According to data from the British National Institute for Economic and Social Research, after leaving the EU, the country's gross domestic product has shrunk by 2-3 percent, and it is expected that by 2035 the decline will reach 5-6 percent. Another study shows that by 2035, because of Brexit, investment in Great Britain will decrease by a third, which will lead to the loss of three million jobs.
A study by the accounting company Menzies has found that every fifth British company wants the government to return the country to the single European market. The British Chamber of Commerce claims that the heads of two-thirds of the companies trading with the EU in 2023 define the related procedures as burdensome, and almost half of the top managers surveyed do not agree that Brexit has helped the development of their companies. Quite the opposite - 41 percent said that the exit from the EU complicated the process of buying and selling goods to EU partners.
„There will be no cardinal revision"
„Leaving the EU has made it more expensive and bureaucratic to sell our goods and services across the Channel," said the director general of the British Chambers of Commerce, Shevaun Haviland. “We need to stop being too careful and start calling a spade a spade," he added.
However, observers do not believe that Starmer will be adventurous in this regard and will prefer to deal with topics from which he will benefit more than the possible rejection of Brexit. The professor of European politics at London's “Kings College" Anand Menon is of the opinion that there will be no cardinal revision of the existing relations. “Starmer does not want much,", he claims.
What does Starmer want and what can he get?
The Labor Party intends to improve the trade and cooperation agreement between the EU and the UK, signed in 2020. Among the relatively uncontroversial things she is pushing for are changes in the field of veterinary control to reduce paperwork and border checks on products of animal origin, as well as mutual recognition of diplomas.
Labour's platform documents also call for a new defense pact between London and Brussels aimed at strengthening collective security. But does Brussels share the same opinion? Professor Menon doubts that the EU will agree to cooperation on what concerns the economic side of defense activity.
Melanie Vogelbach from the German Chamber of Commerce and Industry believes that the EU and Great Britain should cooperate because “the divergence between the British legal framework and EU legislation" will continue to create new trade barriers.
Mike Galsworthy, for his part, predicted that over time public opinion could change and this would give Keir Starmer the ability to phase out Brexit if he wanted to. But it is not excluded that the EU will refuse in this case. Analysts are sure that Brussels is not eager to take the difficult path to the possible return of Great Britain to its ranks.