Government says EU reset is a 'huge boost for growth' - does the claim stack up?

ITV News

19-05-2025

A closer trading relationship with the European Union carries economic benefits and political risk.
The government describes the reset it has negotiated as a 'huge boost for growth'. It's definitely a boost.
Many of the border checks and inspections, and much of the paperwork that Brexit created for trade in food, plants, and animals will go, reducing costs, hassle, and queues at the border.
The agreement on the trading of carbon emissions will mean British steel, aluminium, and energy companies avoid penalties on their exports to the EU from next year.
The government has run the numbers and says these things will add £9 billion to the UK economy by 2040.
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Put another way: economic growth in 15 years will be 0.3% higher than it would be without the EU reset. But that offsets only a little of the losses Brexit has caused.
The government's own forecaster, The Office for Budget Responsibility (OBR), assumes that leaving the European Union on the terms Boris Johnson's government agreed will leave the UK economy 4% smaller in the long run than it would otherwise have been.
The government says the trade deal could also lower food prices and increase choice in the supermarket. The question is: will it do either of these things in a way that will leave the average person feeling better off?
John Springford, Associate Fellow at the Centre for European Reform, is doubtful.
'I think the price of goods will come down a bit, certainly in the food that we import from the EU and we might get a bit of a better range, but I don't think it's really going to make a really noticeable difference to people's shopping bills,' he told ITV News.
The government hasn't explained clearly how its £9 billion figure has been arrived at.
Springford thinks the boost to GDP is slightly smaller. 'Around 0.1% over the next decade or so,' he estimates.
The economic benefits of this deal are more modest than perhaps some in government suggest, but tonight the chancellor is indicating this is just the beginning.
The relationship will be finessed further in the years to come.
Rachel Reeves insists the UK will not be rejoining the single market, the customs union, and there won't be a return to freedom of movement for EU citizens.
The chancellor does want an agreement that will make it easier for British artists to tour the EU.
Sir Elton John has previously complained that all musicians face huge extra costs as a result of Brexit.
At some point, the government will agree to a Youth Mobility Scheme, allowing more young Europeans to come to live and work in the UK for a limited period.
How many? How long? Will they pay 'home' fees to attend UK universities? How is such a scheme compatible with the pledge to cut net migration?
The government won't say. The answer to these hugely sensitive political questions has been kicked down the road.