Rejoining the EU Would be a Waste of Time

It has been reported that Sir Keir Starmer and Rachel Reeves have concluded that rejoining the Single Market at Customs Union would be the most effective way to boost the UK’s economic growth but they’ve ruled out doing so. This is the correct decision.

I don’t want to get into the tedious and toxic Brexit debate. I personally have long favoured the UK rejoining the Single Market and had advocated that this is what Brexit should have looked like. An EFTA style arrangement where the UK would enjoy frictionless trade with the EU while also being relatively free to forge its own path. However, I don’t think that should be a priority for the next government.

Most of the arguments for/against rejoining the SM or EUCU tend to be about eradicating barriers to trade, the UK becoming a rule taker, increased immigration/restoring Freedom of Movement, the costs involved, economic growth, the UK’s place in the world, sovereignty, and democracy. Those are all good and fine points to debate. However, there is one argument against rejoining the EU that is often overlooked, namely the opportunity cost of doing so.

The opportunity cost of rejoining the EU would simply be too high for the UK. Remember what was involved in leaving the EU? Taxpayers’ money spent on hiring officials (and advisers) to staff entire new departments such as DExEU and DIT. I’m all for job creation schemes where I am a direct beneficiary but that isn’t necessarily the best way to run a country.  It involved every single department in Whitehall as it turned out that disentangling your country from the EU was actually quite tricky. All of this was not only incredibly expensive for taxpayers, it also meant that officials had to abandon what they had been previously working on and focus on Brexit.

It is the same when it comes to politics. The successive Prime Ministers – whose time is incredibly pressured – focussed on little else. We all remember Theresa May’s repeated trips to meet with EU leaders as she attempted to negotiate a deal. Now, I personally think it was a good thing that Theresa May had as little opportunity as possible to meddle with the economy, but it also prevented her from working on other important issues. Parliamentary time was taken up as various Bills relating to Brexit were debated and the government even found itself fighting legal battles at the Supreme Court about it. Nothing else got done.

It would be the same with rejoining the EU in some form. Leaving aside the fact that the EU might not be too keen to welcome the UK back anytime soon, there would have to be a great deal of time spent on pre-negotiations as ministers and officials sounded out the EU. If that all went to plan then there would be the actual negotiations which would quickly become all consuming for the Prime Minister and their team. If the negotiations were quickly completed then it would mean another referendum (yay!). Again, the government would be officially campaigning for a ‘Yes’ vote which would again take up its time. Then, assuming it won the referendum, Rejoin would have to be implemented. This no doubt would involve at least one new department but would also create work for every other department as well as organisations such as the Bank of England. 

Moreover, it would take up a huge chunk of Parliamentary time. It would also likely alienate some of the government’s own MPs as well as seeing at least one opposition party working against it. This would mean that the government would no doubt have to trade other contentious policies away in order to push through Rejoin. In short, nothing else would get done.

This would be a tragedy. I am still undecided about who I will be voting for but so far it’s a choice between Lib Dem, Labour, and simply not bothering. However, I am writing a piece on why I’m relaxed about a large Labour majority as it will give the government the opportunity to push through the reforms the country so desperately needs. Rejoin would prevent this from happening.

So, what should a Labour government focus on instead? There are three big things that will be difficult and unpopular but it should be done anyway.

First, it needs to push through with planning reform. This will be difficult as government’s tend to be lobbied by their MPs who in turn have been harassed by their NIMBY constituents. The restrictive planning system which makes it almost impossible to build homes, transport infrastructure, solar farms, nuclear power plants, wind turbines, data centres, labs, and offices is the key thing holding the country back. If a Labour government is serious about economic growth then it should be prepared to annoy and alienate many of its own MPs in order to push through planning reform.

Second, tax reform. This may sound dull but it has the potential to be incredibly unpopular. As I’ve written before, the country is in dire need of tax reform as our current system is too complex and it stifles and distorts economic activity. A Labour government should be prepared to introduce bold measures such as scrapping Stamp Duty Land Tax, removing all exemptions for VAT, and introducing a Land Value Tax. Again, this will take up a lot of time and will require a lot of work and A LOT of courage, but these are necessary reforms.

Finally, there is health and social care. My second ever post on here back in November 2022 was on why I felt that only Labour could save the NHS. This is because Labour is seen as the party of the NHS and so hopefully any reforms introduced would be less likely to see hysterical headlines about the NHS being sold off to greedy US private equity firms. This is important as health and social care are in desperate need of reform if we are going to increase patient outcomes and give vulnerable people the help they need. This will probably look similar to an insurance style system common in most European countries where the State still pays for treatment and care, but there are more providers involved. This will no doubt be the most controversial of the three reforms – perhaps even more controversial than leaving the EU or locking people in their homes for months on end – so it will require all of the government’s time and skill to make it happen.

Should the UK rejoin the EU or some form of it? I’d certainly welcome a closer relationship with it. However, given the time and work involved it would take up an entire Parliament and perhaps even two to get it done. As such, the priority for the next government should be doing other controversial but necessary reforms to planning, tax, and health and social care. Focussing on these three areas while continuing to cooperate with the EU by building bridges as well as forging closer relationships with like minded countries around the world will mean that the UK is richer, healthier, and more comfortable about who we are as a nation. This would be a good thing in itself but would also mean the UK is in a better position to reconsider its relationship with the EU 10 years from now. 

Thanks as ever for reading. If you would like to support Opportunity Lost then you can do so here: https://buymeacoffee.com/opportunitylost

Enjoy the sunshine and the football!