LONDON — Rejoining the European Union would leave the average British household about £6,500 worse off by 2036, according to a new report from the Growth Commission, an independent group of economists. The report, covered by the Telegraph and splashed on the front of the Sunday Express, lands five days before Prime Minister Andy Burnham flies to Brussels for his EU summit.
The 176-page study models thousands of EU rules covering business and trade, many of which it calls “anti-competitive market distortions”. It then prices up every option on the table, from tweaking today’s deal to going all the way back in. The cost to the average household by 2036, by the report’s reckoning: rejoining the EU in full would leave households about £6,500 worse off, a hit of almost £200bn to the economy over the decade; joining the European Economic Area, Norway-style, would cost £4,820; joining the customs union only would cost £2,300; and improving the existing Trade and Cooperation Agreement would leave households about £13,000 better off, a GDP per head boost of around 11 per cent.
“We have found that aside from enhancing the existing trade agreement with the EU and engaging in substantial regulatory reforms, all of the options incur a net cost for the UK, some substantially so,” said Shanker Singham, the commission’s chairman and head of the trade consultancy Comptere. He called the study “a forensic analysis of all the options” that “provides the Government with the clear costs and benefits of each in turn”.
A big part of the bill, the report argues, comes from the terms Britain would get second time round. Brussels would be unlikely to hand back the old UK rebate, which cut Britain’s net contribution by roughly two thirds, and keeping the pound, rather than signing up to the euro, could come at the price of “expensive concessions”. Its authors say Britain would lose the edge it has in trading with the rest of the world and would be forced to accept rules written in Brussels.
Labour’s answer was short. A party spokesperson said the figures were “based on highly speculative assumptions” and pointed out that the group has “close links to Liz Truss”. “A closer relationship with the EU, within the Government’s clear red lines, will help make trade smoother, cut bureaucracy for exporters and support economic growth in the national interest,” the spokesperson said. Sky News, which examined the report, was sceptical about its neutrality, noting that the Growth Commission’s commissioners and board of advisers include figures such as Sebastian Kurz, the former Austrian chancellor, and Tony Abbott, the former Australian prime minister, and that the Office for Budget Responsibility and the Bank of England had given different assessments.
The row reached breakfast television on Sunday, when Cabinet minister Pat McFadden faced tough questions from GB News presenter Camilla Tominey over Burnham’s bid to reverse Brexit. Tominey asked: “Why on earth would you advocate such a policy in a cost-of-living crisis?” McFadden replied that the Office for Budget Responsibility had said the economic cost of leaving the EU would be 0.4 per cent of GDP in the long term. Tominey also pressed him on the cost of the reset alone, putting it at £21bn.
The timing matters. Burnham goes to Brussels on Friday, 20 November, for a summit to “reset” relations. The Telegraph says he is expected to sign deals that line Britain up with EU rules on food standards and net zero, and to agree higher tariffs on Chinese vehicle imports. Burnham has said he hopes Britain will rejoin the EU in his lifetime, and only yesterday told Welsh Labour that Britain had “lost more than we’ve gained” from Brexit.
The Growth Commission’s figure is a different sum from the one put out this week by the new Stay Out campaign, backed by former deputy chief Brexit negotiator Oliver Lewis and Lord Gove, which said rejoining would cost Britain £39.3bn a year — £750m a week — in membership fees alone. That number is about the cheque Britain would send; the Growth Commission’s is about what Brussels rules would do to growth, and it would hit household incomes. It is also worth noting that economists disagree on Brexit: the Office for Budget Responsibility still assumes leaving cuts long-run productivity by about 4 per cent. This report is a model, not a fact — but so is every number used to sell the reset.
