Economic Realities and Future EU Relations

This is the Guardian Brexit remains the scar that hasn't healed. It's hundreds of billions of pounds that have been sucked out of the British economy. The problem for the politicians is that they can't really address that without risking reopening really awful bitter war, leaving the European Union was a catastrophic mistake. I am not proposing that the UK considers rejoining the EU. I respect the decision that was made at the referendum. European politicians are quite determined that if the UK does come back in, it will not be on the same terms as it had So they're really in a bind. The Brexit debate has been reignited after Labour leadership contender Wes Streeting said the UK should rejoin the EU. But with a crucial by election in Lee voting Makerfields, is this a gift to reform From the Guardians Today in Focus, this is the latest with me, Lucy Half Well're joining me from Paris is our Europe correspondent, John Henley. Hi John, it's great to see you. Nearly ten years exactly since Britain voted to leave the EU. We are now suddenly having another conversation about Brexit after these comments from where Streeting who's made it very clear that he plans to stand in any leadership challenge to Kir Stara He's described Brexit as a catastrophic mistake, making life quite hard, perhaps by design for Andy Burnham, who's campaigning in a very strong leave voting constituency in Makerfield in the hope that he might be able to run in the leadership race to be having this conversation, it feels like Labour top bras are trying to put this back in the box. So why is it so toxic for labour politicians to talk about? Well, I mean, it's toxic for labour and for all the mainstream politicians in the UK, I think really. It's this Brexit remains the scar that hasn't healed, the wound that hasn't healed And it's just incredibly difficult for both Labour Party politicians and Conservative party politicians. They're really caught in a trap insof farar as you know, I think it's pretty much accepted now that the economic damage of Brexit has been really catastrophic. You know the latest kind of really quite reputable estimates from the National Bureau of Economic Research, really very respected economists saying that the hit to British GDP is basically between between six percent and eight percent by the beginning of last year since Britain left the EU. That may not sound like a lot It's hundreds of billions of pounds that have been sucked out of the British economy by these immense barriers that it's put up with its biggest trading part But the problem for the politicians is that they can't really address that without risking reopening kind of you know, really awful bitter cultural identity war that Brexit opened up. So they're really stuck with that. And obviously, as Andy Burnham will have to confront In the meantime, there is Nigel Farage and Reform UK, who will clearly throw everything at this by election and will accuse whoever suggests rejoining the EU or even getting much closer to the EU of betraying Brexit So they're really in a bind Yeah Andy Burnham at last year's Labour Party conference at a Guardian event said that he would like to see the UK rejoin in his lifetime to quote him. So in the longer term, those are comments that will likely dog this very, very crucial campaign. I mean, he's been keen to sort of pour water Dan on that, he said know it's not something that I'm campaigning on at this point, but as you say, Farage is likely to put that on every single election pamphlet or every single conversation that happens on the doorstep in Makerfield in the weeks to come. So John, in terms of the polling, according to UGov, a majority of Brits now would like to rejoin the EU fifty five percent and amongst labour voters That's as high as eighty percent. So that's given Kirstama the case to push for closer ties and to look for a reset, which he has done since taking office in twenty twenty four. What has that reset looked like? He walked into number ten saying Stahmer that you know he wanted a much closer relationship with the EU. And since then, he has on multiple occasions repeated that you know, really wanting to put the UK back at the heart of the European Union, claiming that you know the various kind of quite small deals that he has managed to negotiate with the EU would give Britain the best access to the single market and all that kind of thing. But if you look at the actual progress that's been made, it's really baby steps, in fact. The UK has rejoined the Horizon programme, which is the EU's science programme, although that was negotiated by the previous government They' also from next year, Britain is going to return to the Erasmus plus kind of student exch and young people exchange programme. But you know, when things get a little bit tougher, particularly when money is involved, talks are really pretty much stalled. So you know there was hope that Britain would enter the European electricity market. That's been stymered by a demand from the EU that Britain pay into cohesion funds for sort of less well off EU member States Similarly, Britain has been shut out of this big safe defence procurement loan programme that the EU has, again because Britain wasn't willing to make the financial contribution that the EU was asking for. And finally, there's a much vaunted youth mobility scheme which The UK prefers to call a youth experience scheme. reasons for quite telling reasons, I think. But you know that's stuck at the moment because the EU is insisting that EU students in the UK should have to pay EU student fees, air tuition fees, which are much, much lower than So you know, really there's not been much progress. It's kind of been, you know really sort of small little gains here and there, but nothing that is going to move the dial, really. I mean that's the key thing, notothing that's going to move the dial on that big economic hit that we just mentioned. But the reality is quite different to the sort of rhetoric that we hear from Stara, isn't it, John? Stamer talks about this reset, these closer ties, but the reality is even if there is greater cooperation,, more meetings with the EU Commission Chief Essel von der Leyen, more statements of support, that cooperation, particularly on security and defence when it comes to Ukraine or more recently against Donald Trump in the Iran war, doesn' necessarily equal greater economic cooperation? Absolutely, that's really the nub of it. I mean there's certainly absolutely a willingness on the EU side to see rer cooperation with the UK on defense and security matters and clearly, you know r is a nuclear power. The only nuclear power in the EU is France. Britain has one of Europe's largest armies. know there's plenty of interest in the EU in developing that cooperation around security and defence. But when it comes to the economy, The issue really is these redlines that the Labour goovernment put in its manifesto and has stuck to kind of religiously ever since, which are basically no we will not be returning to the European Union. We won't be returning to the customs Union and we won't be returning to the single market And until those red lines are eased I mean, that basically really constrains and really limits what can be achieved in terms of economic integration. And this was all part of the twenty twenty four campaign strategy, wasn't it to win those red wall seats that gave Kistama his landslide majority In a hypothetical world where West Streeting is victorious in any leadership challenge and he does follow through on this desire to rejoin the EU, what would that look like? I mean would that involve a second referendum or would it be a campaign pledge or a manifesto pledge? I mean it would need some kind of vote, certainly either an election or a referendum. I mean, basically the EU would need to be convinced that Britain was serious about this. The big issue here is that although European populations are actually quite keen to see the UK return, European voters and European politicians to turn into that if the UK does come back in, it will not be on the same terms as it had So you know it won't have the opt outs of particularly like the Schengen Zone and various other opt outs that Britain secured. It won't have the rebate that Margaret Thatcher negotiated. There might have to be a very difficult conversation about joining the euro. So you know basically, Europe is interested But it needs to be on the EU's terms, I think. Well, that sounds like a conversation that is going to happen very much in the long term, given how divided that things still are and how naval gazing the UK can still be on this issue. But John, thank you so much for your time That's it for today. My huge thanks again to John Henley, our Europe correspondent. You can keep up with his reporting over at theguardian dot comot And do listen to our Sister podcast Politics Weekly, looking ahead to another week of turmoil at the top of the Labour Party Thanks for listening to this episode of the Latest. Today in Fcus will be back as usual tomorrow morning, the latest, tomorrow night. This episode was presented by me, Lucy Hoff. It was produced by Brianie Moore. 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