The short version
- Leading business representatives argue that repairing economic harm from Brexit should be the immediate priority for Prime Minister Andy Burnham.
- Surveys indicate more than half of company leaders believe the existing trade arrangement fails to support their operations effectively.
- Economists estimate the long-term impact on national income and GDP remains significant, prompting calls for bold fiscal action in the upcoming budget.
Prime Minister Andy Burnham faces mounting pressure from Britain’s business community to treat the repair of economic damage caused by Brexit as his administration’s foremost objective. Shevaun Haviland, director general of the British Chambers of Commerce, has explicitly endorsed the government’s decision to revisit previous political constraints regarding European Union membership. While acknowledging that reopening these debates introduces uncertainty, Haviland contends that the current trading framework is detrimental to commercial interests and requires urgent correction.
The sentiment reflects a growing consensus among corporate leaders that the status quo is unsustainable. According to data collected by the BCC, more than half of the executives surveyed believe the deal negotiated in 2021 under Boris Johnson’s government is not aiding their businesses. Haviland noted that while initial difficulties were anticipated as companies adjusted to new regulations, the expected easing of friction never materialized. Instead, operational challenges have persisted, undermining confidence in the existing arrangement.
The economic toll of leaving the single market continues to be substantial. Independent estimates suggest the UK economy has suffered losses amounting to up to £240 billion since the departure. Furthermore, national income per capita is projected to be between 6% and 8% lower than it would have been had the country remained in the EU. The Office for Budget Responsibility forecasts a long-term reduction in gross domestic product of approximately 4%, highlighting the structural nature of these economic headwinds.
Burnham has already signaled a shift in tone, stating at Labour’s recent conference in Liverpool that Brexit had caused more harm than good. He pledged to reassess Britain’s relationship with the bloc, leaving open possibilities ranging from minor adjustments to full rejoining. This week, he characterized the failure to pursue a better deal as a major dereliction of duty, aligning his rhetoric with the concerns raised by business leaders like Haviland.
The British Chambers of Commerce plans to consult its 50,000 members, who collectively employ over 6 million people, on various options for future relations. Haviland emphasized that the organization approaches this as an economic rather than a political issue. With ten years having passed since the referendum, she argued that the language of Brexit has become obsolete. The focus must now shift to practical outcomes, comparing past conditions with present realities to determine the best path forward.
Nova Fairbanks, chief executive of the Norfolk Chambers of Commerce, echoed these concerns during an interview in Norwich. She observed that even some business leaders who initially supported Brexit are beginning to recognize the economic damage inflicted. While those opposed to leaving remain steadfast in their desire for closer ties with Europe, the broader business community appears increasingly unified in seeking relief from current trade barriers.
Compounding these structural issues are immediate pressures from rising energy prices and geopolitical instability, including effects stemming from the war in the Middle East. Haviland urged Chancellor John Healey to take bold action in the upcoming budget to support firms, despite government concerns about public finances and bond market stability. She criticized the notion of a cautious, steady-as-she-goes approach, arguing that businesses require active measures to alleviate costs and stimulate growth.
Specific recommendations include reforms to energy bills, business rates, and taxes on employment to help companies recruit younger workers. Haviland pointed out that approximately 60% of an energy bill consists of tax rather than the cost of energy itself, suggesting significant room for government intervention. The test for the chancellor, she said, is to demonstrate genuine support for private-sector wealth creation through tangible fiscal policies that address these persistent burdens.
Sources behind this briefing
Go to the original reporting
- The Guardian World↗Repairing Brexit economic damage should be Burnham’s top priority, business chief says
