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Deputy Prime Minister David Lammy has suggested rejoining the EU’s customs union could boost economic growth – as ministers increasingly attack the financial damage caused by Brexit.
Mr Lammy refused to reverse Brexit seven times in an interview, arguing that leaving the EU would cause huge damage to Britain’s economy and saying Labor should consider closer integration with Brussels.
The OBR estimates that leaving the EU would reduce long-term productivity in the UK by 4 per cent.
Chancellor Rachel Reeves said ahead of the Budget Brexit had even greater impact uk economy than critics had predicted,
Mr Lammy said it was not currently government policy to rejoin the customs union, but it was self-evident that other countries had seen developments after doing so.
Health Secretary Wes Streeting said on Wednesday that the Labor Party must repair the “economic damage caused by Brexit”.
Baroness Shafiq, Prime Minister Sir Keir Starmer’s chief economics adviser, and some senior figures close to Number 10 are also reportedly pushing for closer ties with the EU.
Ms Reeves said in October: “Things like austerity, capital spending cuts and Brexit have had a much greater impact on our economy than we expected at the time.
“That’s why we’re unashamedly renegotiating our relationship with the EU to reduce some of the costs that, in my view, were unnecessarily added to businesses since 2016 and since we formally left a few years ago.”
Labour’s manifesto promises not to rejoin the single market or customs union, but pressure on the issue is increasing from MPs and advisers after poor growth forecasts.
Mr Lammy, who is also Justice Secretary, was asked on the News Agent podcast about the idea of becoming part of the customs union again, he said: “That is not our policy at present. We are not there at present.
“But you can see that countries like Turkey that have a customs union are benefiting and seeing growth in their economy, and again, this is self-evident.”
He said his comments were “subject to collective responsibility”, meaning they should follow Sir Keir’s position.
But Sir Keir’s chief secretary Darren Jones rebuked Mr Lammy in the Commons, saying Labour’s policy would be announced in parliament, not “on a podcast”.
