By Hilary Benn

Published 26th Apr 2023, 05:45 BST

I met many people during the campaign who made the sovereignty argument. Indeed, they said, “I don’t care about the economic impact. My sovereignty is more important.” I respect people’s right to hold that view; I fundamentally disagree with it.

But what was unforgiveable was to claim that we could have all our sovereignty, keep all the benefits of being a member of the European Union and get further benefits on top of that. It simply was not true, and we now know it was not true.

Therefore, those who argued for us to leave the European Union are now in a state of confusion and denial. That is what is going on, particularly around the economic consequences.

Lorries queue for Port of Dover along the A20 in Kent as the getaway continues for the Easter weekend. Picture date: Friday April 7, 2023.

If we do not understand what those are, how on earth are we going to build a different relationship with our European colleagues over the months and years ahead?

The truth is that Brexit has had a bad impact on the economy. I was really struck by the statistic that showed that the number of small businesses trading goods with the European Union declined by one-third between 2020 and 2021. That is not entirely surprising, because it is small businesses that find it most difficult to cope with the burden of cost, bureaucracy and red tape.

Brexit was sold as getting rid of cost, bureaucracy and red tape, but it has dumped the biggest load of those three things on British businesses that we have seen in our lifetime.

We will be the worst-performing large economy in the world this year, and business investment as a percentage of GDP has stalled since the referendum in the UK.

It is worth reminding ourselves that the Office for Budget Responsibility said that Brexit “will result in the UK’s trade intensity being 15 per cent lower in the long run than if the UK had remained in the EU. The latest evidence suggests that Brexit has had a significant adverse impact on UK trade, via reducing both overall trade volumes and the number of trading relationships between UK and EU firms”.

Ironically, while all these costs have been imposed on British companies exporting, the Government have not yet introduced full checks on goods coming into the United Kingdom from the European Union. Why?

Because they are afraid of shortages and delays. So the sovereignty that has been gained is not being used to apply the same checks going one way as we are facing the other way.

The fundamental truth is that if we make trade with our biggest trading partner more difficult, we should not be surprised if it has an adverse effect on the British economy, at a time when we need all the growth we can get to help our constituents.

The truth is that we cannot simply reverse what has happened.

We will have to build a new but different relationship with the European Union, which will take time. Who knows what it will look like or what this country will look like in 10, 20 or 30 years?

We have to be honest about the effect that the change has had on our country and our economy.

Hilary Benn is Labour MP for Leeds Central. This is an edited version of a recent Westminster Hall speech.

Honest appraisal is needed of Brexit's negative impact on British businesses: Hilary Benn