Labour’s Brexit Reset Faces Criticism for Lack of Growth, Says Expert Reports
The Labour government’s post-Brexit trade deal with the EU is failing to deliver meaningful economic growth, according to two separate reports published ahead of the 10th anniversary of the Brexit referendum. The findings, from the Business and Trade Committee (BTC) and the Centre for Policy Studies, challenge the government’s claims that the agreement would boost the UK economy and ease the cost of living.
What Are the Key Findings of the Business and Trade Committee’s Report?
The BTC, a cross-party group of 11 MPs, warned that the government’s “reset” deal would add just 0.5% to GDP by 2040 in an “optimistic scenario,” falling far short of the economic revival promised by Prime Minister Keir Starmer. The committee criticized ministers for “rhetoric-reality gap,” noting that the deal lacks clarity on trade, regulatory alignment, and long-term growth strategies.
Liam Byrne, BTC chair, stated: “Business cannot invest on political signalling alone. It needs clear rules, a clear destination, and a credible vision.” The report highlighted five critical issues, including delayed negotiations on electricity trading, unresolved steel tariffs, and a lack of coordination on “dynamic alignment” with EU regulations.
How Do Experts View the Economic Impact of the Deal?
The Centre for Policy Studies, a right-leaning think tank, echoed concerns, with Gerard Lyons, former Bank of England contender, calling the reset “no substitute for a credible growth strategy.” Lyons argued the deal risks “saddling” the UK with a low-growth trading bloc, as the nation’s global economic share has declined over the past decade.
“The UK should not tie its hands by imposing restrictive regulations,” Lyons said. “Post-Brexit levers—such as tailored trade policies—remain underused.” The report emphasized that the deal’s opportunity costs could outweigh its benefits, particularly in sectors like manufacturing and technology.
What Are the Concerns From Industry and Trade Groups?
Businesses and trade organizations have raised alarms about the deal’s practical implications. The Policy Exchange think tank found that the reset’s food standards rules could cost the UK more than the government’s own estimated benefits. Former trade secretary Lord Lilley warned that sectors like fishing and pharmaceuticals face “billions in additional red tape.”
The British Chambers of Commerce (BCC) noted that over half of exporters struggle with the current EU trade framework, citing VAT complexity, border delays, and inconsistent professional qualification recognition. William Bain, BCC trade policy head, cautioned against rejoining the EU or a customs union, stating: “Firms want more trade with Europe, the US, and Asia—not to rehash old debates.”
What Are the Broader Implications for the UK Economy?
The critiques highlight a growing divide between the government’s optimism and economists’ skepticism. While the Labour leadership emphasizes closer EU ties, critics argue the deal fails to address structural challenges, such as regulatory divergence and global market competition. The BTC’s report also noted that six key policy requests from the committee remain unaddressed, including reforms to the Erasmus program and steel trade negotiations.
As the UK Parliament debates the deal, the debate over post-Brexit strategy remains unresolved. With the economy facing inflationary pressures and global trade shifts, the government’s ability to balance EU relations with domestic growth will be critical in the coming years.