Saqib Bhatti: Brexit didn’t cost us 4 per cent, but Labour will argue it did anyway

Saqib Bhatti MP is Shadow Education Minister.  

For years now, anyone who dares to defend the result of the 2016 referendum is met with the same weary refrain: “Brexit made Britain 4 per cent poorer.” It is a claim repeated so often that you would be forgiven for taking it as settled fact. It isn’t.

However, as a beleaguered Keir Starmer looks for ways of shoring up his position and entertaining the ideas of closer and dynamic alignment, we should brace ourselves for Labour Minister after Labour Minister repeating this relentlessly and without mercy.

In truth, the famous “4 per cent GDP hit” is not a measured loss, not an observed collapse, and not proof that Britain “wrecked” its economy by voting Leave. It is a model-based projection — one of several — based on assumptions about what might happen to productivity over the long term. And like any model it can be manipulated.

The “4 per cent poorer” argument depends entirely on a fictional version of Britain — one that stayed in the EU, avoided every global shock, and followed a perfectly smooth pre-2016 trend forever.

That Britain never existed.

If Brexit had truly wiped 4 per cent off the economy, we would expect to see an obvious and permanent collapse in output. That never happened. Britain’s economy didn’t fall off a cliff as was repeated on steroids during the referendum.

UK GDP continued to grow after 2016. Growth slowed at times, but it remained positive across much of the post-referendum period. Even today, official figures from the Office for National Statistics show the economy still expanding, albeit slowly under this anti-business and pro-trade union Chancellor.

That is not what a 4 per cent “loss” looks like. It isn’t real.

What is real is that Britain has shown immense strength and resilience. Since 2016, the UK, like every other major economy, the United Kingdom has been hit by numerous major shocks that have done serious damage to the global economy.

The COVID pandemic effectively brought economies to a halt, forcing governments to spend billions subsidising industries that couldn’t keep going. This, once in a lifetime pandemic, led to a collapse in the global supply chain that and hurt economies across the world. In fact, being out of the European Union helped us deal with the pandemic and get our economy back up and running. It was precisely because we were out of the European Union that we had the fastest vaccine rollout in the world and in Europe. This was despite Starmer protesting at the time that we should follow the European Medical Health Agency. That would have meant longer lockdowns and lower GDP.

Coupled with this, we saw major war in Europe for the first time since 1945. Putin’s invasion of Ukraine caused global instability and saw a surge in the cost of energy. This has pushed up bills for families and businesses which has done nothing for economic growth.

Germany has suffered recession. France has stagnated and President Macron can’t even pass a budget. The idea that Britain’s performance exists in a vacuum is simply false. In fact, The UK economy has outgrown Japan, Germany, Italy and France since 2016. The only thing that has threatened that has been Rachel Reeves and thi

If Brexit had been uniquely catastrophic, Britain would stand out dramatically from comparable economies. It doesn’t.

Now of course, when you have huge constitutional change as we did when we left the European Union there may well have been some short-term cost. But any common-sense analysis of the facts will show it isn’t the 4% drop in GDP that is oft repeated. It is just as likely to be negligible and more likely to be a net positive impact in the long-term. That depends on us. Our future is in our hands.

Brexit reshaped Britain’s trading relationships. It created challenges and opportunities. Reasonable people can debate whether it was the right choice, but pretending that Brexit definitively “destroyed” 4 per cent of GDP is not economics, it’s politics.

Now Keir Starmer’s back is against the wall, pursuing dynamic alignment where the UK ends up being a rule-taker and paying for the privilege is a foolhardy way of buying off his backbenchers. Unfortunately, it won’t work and will leave the UK in a worse off position with unelected bureaucrats once again dictating to us how we should live our lives. No wonder the EU economy commissioner has said this month that the European bloc is ready to engage with “an open mind” when asked about a customs union.

In this context, Keir Starmer’s attacks on Brexit and its impact on the economy are as predictable as they are risible. If we want an honest national conversation about growth, productivity, and our place in the world we must not let Labour politicians use recycled myths to scare the British public into a new settlement with the European Union.

The British public deserve better than that.