Sir Keir Starmer's new deal with the European Union is "astonishingly bad" and threatens to pile costs on British companies while thwarting innovation, according to the Thatcher-era minister who oversaw the UK's entry into the single market.
Conservative peer Peter Lilley has sounded the alarm in a new report about the deal being negotiated by Labour which will see Britain "align" with Brussels' regulations in a host of areas. He warns the EU will ensure "the UK is seen to have gained as little positive as possible from leaving the EU" to "discourage any other member state from following Britain's example".
Lilley's Warning
Lord Lilley, who was Secretary of State for Trade and Industry under Margaret Thatcher, says he predicted that single market membership would boost British exports but he was "proved wrong". He claims Labour has made the mistake of thinking that "participation in the single market would magically boost UK exports and economic growth".
He said: "Over our 28-year membership British goods exports to the EU grew less than 1% a year, while our exports to countries we had no trade deal with grew four times as much – by 87%. In a triumph of hope over experience, the Government is pursuing a 'reset', making dynamic alignment with EU rules the norm across our economy."
"This unilateral submission won't help our exporters (who already conform to EU rules) but will burden the 92% of British firms that don't export to the EU with the overregulation which has crippled EU growth. And the EU expect us to pay them for this."
Reeves' Stance
He was alarmed when Rachel Reeves declared in her Mais lecture the UK should "align with EU regulation" when it is in the national interest – and that while there may be areas where Britain should set its own regulations this "should be the exception, not the norm".
Policy Exchange Report
The Policy Exchange report argues the EU will be the principal beneficiary of an agri-food deal because the bloc exports nearly four times the amount the UK exports back. It warns that rejoining the Erasmus+ scheme, which allows students to study in a different country, will cost £570million – far more than the Turing scheme (£110million) which it says enabled young Brits to spend time in a greater range of nations.
Lord Lilley's report claims the veterinary (SPS) deal will burden British food producers with 76 new regulations and directives at an estimated cost of £1billion. It expects merging the UK and EU emissions trading schemes will cost British Industry £1.1 billion a year.
Critique of Deal
Lord Lilley argues that "such an astonishingly bad deal as the proposed reset is the result of a series of mistakes" – including ministers believing that a "friendly, Europhile government will be offered a better deal". He writes: "We can only hope that ministers will realise that a deal as presently outlined is so contrary to our national interest that they pull back before signing away any more of Britain's interests."
A Government spokesperson said: "The reality is that red tape at the border has added billions in costs, fuelling inflation and choking growth. No one wants to see food rotting at the border; it's a massive waste that takes money straight out of the pockets of British families and businesses."
"Our SPS deal will add up to £5.1billion a year into the economy and slash red tape that drives up supermarket prices. This is about making Brexit work for the British people."
