Ministers have pledged to ‘tear down’ barriers to trade with the European Union after new figures showed Brexit has cost UK business £37bn a year.
The price of the UK’s departure was laid bare as the government said the UK’s total trade with the EU was 5 per cent lower than before we left the bloc.
Trade minister Douglas Alexander hit out at the Brexit deal agreed by the previous Conservative government, saying it was “clear .. (it) is not working well enough.”
Labour is currently negotiating a “reset” of relations, in a deal Keir Starmer has said will repair the UK’s damaged relationship with the EU for the benefit of “generations to come”.
Mr Alexander said ministers would work with other countries “to improve the UK’s trade and investment relationship with the EU, tearing down unnecessary barriers to trade to help drive growth”.
He added that in the 12 months to the end of September last year the UK’s total trade with the EU was 5 per cent “below the level seen in 2018”, before the UK left the bloc, once inflation and precious metals were excluded.
Analysis by the House of Commons library estimates the 5 per cent drop to be worth £37bn.
Mr Alexander’s comments came in a parliamentary written answer to the SNP MP Stephen Gethins, who commissioned the analysis.
He said: “This is an appalling loss of trade at a time when business and the Exchequer can ill afford it.”
He added: “When the government is cutting budgets that will hit the poorest in the UK with benefits cuts – and the most vulnerable around the world with aid cuts – it is obscene that it continues to pursue an expensive and unnecessary hard Tory Brexit.
“The drop in trade makes us all poorer, including taking away resources from the Treasury. It also makes growth more difficult by hobbling business with red tape that is particularly detrimental to SMEs.
“A hard Brexit makes us poorer and less secure. The government must stop punching down on the most vulnerable to balance the books and join the Customs Union and Single Market at the very least.”
Earlier this week, The Independent revealed that Brexit had created a “mind blowing” two billion extra pieces of paperwork – enough to wrap around the world 15 times.
Trade expert David Henig, UK director at the think tank the European Centre For International Political Economy, said the fall in trade revealed by the latest figures was “undoubtedly down as a result of Brexit” and called for practical steps from the government “of which the most important by far is removing regulatory differences”.
Mike Galsworthy, the chair of European Movement UK, said: “Given that the government is admitting that Brexit has hurt UK-EU trade substantially and further says it’s mission is to ‘remove unnecessary trade barriers’, it would be interesting to know why exclusion from the European Single Market, Customs Union and free movement arrangements, which were never on the referendum ballot, are now deemed to be inviolably necessary trade barriers.”
Tom Brufatto, director of policy and research at Best for Britain which campaigns for closer EU-UK ties, said: “No one credible argues that the present barriers to trade have been anything but a catastrophe, particularly for British businesses, but independent research shows that the Government can repair the damage with deeper alignment with the EU, boosting the UK economy by up to 2.2 per cent.
“In the context of eye-watering cuts and increased defence spending, maintaining high food and safety standards is completely uncontroversial and should be expedited at the UK-EU summit in May.”
The Department for Business and Trade declined to comment further.