Exploring Post-Brexit Options for Britain’s Relationship with the EU

Former European Parliamentary Labour Party leader Richard Corbett explores the options for Britain’s future relationship with the EU, following widespread recognition of Brexit’s failure. Prime Minister Andy Burnham has opened a debate on this issue, highlighting four potential paths forward.

The current status quo is deemed unsatisfactory due to significant economic costs. The Bank of England and the National Bureau of Economic Research estimate that Brexit has reduced Britain’s GDP by six to eight percent, resulting in an annual tax revenue shortfall of up to £90 billion. Over 20,000 small businesses have stopped exporting to the EU, and 18,000 have closed. Piecemeal improvements sought by the Starmer government have proven slow and problematic.

Joining the EU’s Customs Union would offer modest economic benefits by facilitating trade with the EU and avoiding customs checks. However, it would not eliminate single market regulatory checks and would limit Britain’s ability to negotiate separate trade deals. Economic estimates suggest a customs union alone would recover only a small fraction of post-Brexit losses, around 0.5% of GDP.

Joining the single market as a non-EU member, similar to Norway, Iceland, and Switzerland, would provide significant economic benefits by allowing British producers to sell throughout the EU without additional certification requirements. However, Britain would become a 'rule-taker,' applying EU regulations without much say in their development. Full EU membership would offer the combined economic benefits of the single market and customs union, along with a seat at the decision-making table and non-economic benefits such as cooperation in foreign policy and security.