Contribution
It is a pleasure to serve under your chairship, Ms Butler, and to respond on behalf of His Majesty’s official Opposition. I congratulate the hon. Member for Perth and Kinross-shire (Pete Wishart) on securing this debate, but I am sure it will come as no surprise to him or other hon. Members that we see the legacy of the 2016 referendum, and indeed the path forward for our country, through a very different lens.
Listening to the hon. Gentleman, one might almost assume that the United Kingdom was a sunlit, frictionless economic Shangri-La until a single ballot paper cast us into eternal ruin. He told us, echoed by other hon. Members, that leaving the European Union uniquely crippled our economy and that our only salvation lies in surrendering sovereignty through the Government’s grandly titled EU reset, or perhaps going further.
That entire narrative collapses under the weight of hard economic reality. First, let us examine the great myth of the EU single market as an automatic engine of export growth. Ministers speak of the single market as if it were a place where magic happens, but if there was magic, the UK was firmly in the audience wondering when the rabbit would emerge from the hat. As former Trade and Industry Secretary Lord Lilley demonstrated in his Policy Exchange paper earlier this year, during our entire 28-year membership of the single market, from 1992, UK goods exports to our EU partners grew by less than 1% per year, but over that exact same period our goods exports to the 111 countries with which we traded on standard World Trade Organisation terms grew by 87%. In fact, according to the European Commission’s own single market scoreboard, the UK was the member state that benefited least from the goods single market. Rejoining that regulatory straitjacket in pursuit of export growth is the pure triumph of hope over experience.
Secondly, we must address the sheer statistical alchemy deployed by advocates of rejoining. Several speakers have brandished a non-peer-reviewed National Bureau of Economic Research working paper that claims that Brexit cost the UK up to 8% of GDP, but let us look at how the model has constructed that parallel universe. It created a statistical doppelganger proxy that was dominated by the United States and Estonia, which between them provide almost three quarters of the entire weighting for the alternative proxies—apparently—for where the UK could have been without Brexit. It assumed that, had we remained in the EU, the UK would have miraculously mirrored the American economic performance.
To attribute that divergence to Brexit requires an extraordinary leap of imagination. It requires one to pretend that there was no US artificial intelligence boom, no massive American fiscal stimulus—which was possible because the dollar is the world’s reserve currency—no transatlantic shale gas price advantage, no differing pandemic shock, and no North sea oil rundown. In fact, Germany fell 8% behind the same arbitrary index under that model, so unless German departure from the EU has passed us by unnoticed, blaming that divergence on Brexit is simply economic nonsense.
When we examine the actual data, rather than econometric fairy tales, the evidence is clear. Between 2016 and 2025, the UK economy grew by 12.2%, and by 5.3% since we formally left, outpacing the European G7 average. Since Brexit, British economic growth has averaged 1.1% per annum, compared with just 0.1% for Germany. As hon. Members have mentioned, the Office for Budget Responsibility previously assumed an implausible 15% collapse in total UK global trade openness, but as its own November 2025 briefing conceded, UK trade intensity has remained stable at around 65% of GDP and has continued to track peer economies such as France.
The single market was overwhelmingly designed for goods, but more than 80% of the UK economy is based on services. Our services exports continue to boom globally. Even the dire predictions of a mass exodus from the City of London proved dramatically overblown. Institutions such as JP Morgan, which had threatened to move thousands of jobs abroad, have instead been transferring staff back from Paris to London.
Although business investment was undeniably delayed during the post-2016 political paralysis, dragged out by those trying to overturn the referendum, fixed investment to GDP rebounded, reaching 19.6% by the end of last year.