The head of one of Britain’s leading business organizations says Andy Burnham must make repairing Brexit’s economic damage his foremost concern as he reviews Labour’s position on EU ties.
Shevaun Haviland, director general of the British Chambers of Commerce (BCC), said she welcomed the prime minister’s decision to revisit Brexit despite the potential uncertainty, arguing that the UK’s current trading arrangement with the EU is detrimental to business.
“We believe this is the right approach, given the evidence showing that the current setup is not working for businesses,” she said.
Citing the ongoing economic impact of Brexit, Haviland noted that over half of business leaders surveyed by the lobbying group believe the 2021 deal negotiated by Boris Johnson’s administration is failing to benefit them.
“We anticipated initial difficulties as companies adjusted to the new rules, expecting conditions to ease over time. That has not been the case,” she said.
Economists estimate Brexit has cost the UK economy as much as £240bn to date, with national income per head between 6% and 8% lower than it would have been had the country remained in the EU. The Office for Budget Responsibility projects a long-term hit of roughly 4% of gross domestic product.
Speaking at Labour’s conference in Liverpool last month, Burnham said Brexit had caused “more harm than good” and promised to reassess Britain’s relationship with the EU. He left the door open to options including full rejoining, and this week described a failure to seek a better EU deal as a “major dereliction of duty.”
Speaking alongside Nova Fairbanks, chief executive of the Norfolk Chambers of Commerce (NCC), during a Guardian interview in Norwich, Haviland said the government must address business concerns over Brexit.
Haviland added that the BCC would consult its 50,000 members, which together employ more than 6 million people across the UK, on a range of options for the UK’s future relationship with the bloc, including rejoining the EU.
“It has been ten years since the referendum,” Haviland said. “The language of Brexit needs to move on. That chapter is closed. Businesses understand what we had before and what we have now.”
“We are apolitical. This is not a political question; it is an economic one. We will lay out the options, ranging from the status quo to the most far-reaching, and consult with our chambers and partners to gauge where people stand.”
Fairbanks said it was evident that some Brexit supporters in business now recognize the economic damage. “It would be interesting to see how many firms that were strongly pro-Brexit remain so, because I have not heard any change of heart from those who opposed it. I believe they still feel: ‘We need to be closer to Europe.’”
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Speaking on the sidelines of an NCC trade fair at the Norfolk Showground, the business leaders said firms face increasing pressure from rising energy costs and other repercussions of the war in the Middle East.
Haviland urged Chancellor John Healey to take decisive action in this month’s budget to support businesses, despite government concerns about strain on public finances amid volatility in the bond market.
“There is talk of a ‘steady as she goes’ budget and ‘not upsetting the apple cart,’ but businesses do not want mere caution. They want to see action that relieves costs and drives the economic flywheel,” she said.
“You cannot effectively proceed in a crouch. Surely markets would welcome government spending cuts alongside investment in private-sector growth?”
Haviland called for measures on energy bills, business rates and employment taxes to help companies hire more young people. “In a typical energy bill, about 40% covers the energy itself. The remaining 60% is tax, so the government can remove some of that burden,” she said.
“The real test for the chancellor is to demonstrate genuine commitment to business in the budget. He must show he truly believes that wealth creators are job creators — and that means backing business.”