Written by 9:25 am Europe Economy

Starmer must tackle economic ‘disaster’ of Brexit, warn Labour grandees | Brexit

Keir Starmer must urgently develop a series of practical policies to address the economic “disaster” of Brexit and prevent it from driving Scotland towards independence, a former Labour Europe minister has warned.

Backed by several other Labour peers, Peter Hain, who is also a former Northern Ireland secretary, says the crises caused by climate change, the Ukraine war, the lack of economic growth and rising energy prices can only be tackled through closer cooperation with our EU neighbours than the current Brexit arrangements allow.

Writing in today’s Observer, Lord Hain describes Brexit as a “taboo subject” because the Conservatives “won’t admit” the huge damage it has done to the economy, and because Labour remains “understandably reluctant to rekindle old Brexit flames”.

But Hain argues that – as the governor of the Bank of England, the Office for Budget Responsibility and the Organisation for Economic Cooperation and Development all now agree – quitting the EU is the main reason why the UK is the only G7 country with an economy still below its pre-pandemic size, and Labour, as the prospective party of government, has a duty to prepare a detailed plan for Brexit damage limitation.

Hain says that, across a range of policies, Brexit has failed and the effects – often those that are the reverse of what was promised by lead Brexiters – will only become more evident, with potentially lethal effects on the union of England with Scotland, Wales and Northern Ireland.

“Brexit, supposed to control immigration, has in fact delivered both chronic labour shortages and a dramatic jump in net migration in the year to June 2022, to a record 504,000 – deeply ironic given the racist undertone to much of the Brexit campaign.

“As these Brexit failings become more evident, support for Scottish independence appears to be edging up. Unless Labour does something about it, we could get independence driven at least in part by Brexit, which Nicola Sturgeon continually stresses in making her case.”

Among the measures Hain suggests, in addition to moves to help UK companies restore exports with the EU, is a negotiated removal of post-Brexit travel restrictions including the 90-day limit on UK citizens visiting the EU in any 180 days. He also proposes action to solve the crisis over the Northern Ireland protocol, and cooperation on energy policy and climate change.

He writes: “It’s high time we all confronted the Brexit fantasy of a ‘sovereign global Britain’. The writing is on the wall. Our destiny lies, if not within then certainly with Europe – and Labour needs practical policies to deliver that.”

Former Labour home secretary David Blunkett backed Hain’s intervention and said the economic cost of Brexit to the government was one factor preventing it from offering more generous pay rises to public sector workers – the cause of current strikes.

Lord Blunkett said: “Peter Hain is quite right to highlight the tremendous economic hit that can be identified as a direct result of Brexit. A 15% drop in trade identified by the Office for Budget Responsibility illustrates, graphically, the loss of resource that could be available to meet the challenge of drastic falls in income and therefore the ability of public employers to offer more generous wage increases and reduce the pressure cooker of industrial action.”

Former TUC general secretary John Monks suggested Labour should back moves to solve labour shortages in the UK. “One problem could be tackled right away: the acute shortages of workers in some sectors, post-Brexit, especially hospitality and agriculture. This could be done by opening the visa scheme from just skilled workers to semi and unskilled key workers.”

Wary of alienating Brexit voters, Starmer, a prominent remainer before he became Labour leader, has been at pains to stress that he will not back any return to the EU single market or customs union, let alone contemplate a return to full EU membership, if he becomes prime minister.

Recently he also ruled out bringing back the free movement of people between Britain and the EU, saying it would be a “red line” for Labour if it got into power – despite having backed the policy three years ago.

As evidence grows of Brexit’s negative effects, many Labour remainers now believe the time has come to support closer links with the EU.

Starmer has also ruled out a “Swiss-style” deal with the EU, which would allow access to the single market but require more generous immigration rules, after reports that the government was considering such an arrangement prompted frantic denials from No 10.

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