Pro-EU demonstrators protest outside Parliament against Brexit to mark the fourth anniversary of the UK’s official departure from the European Union, on January 31, 2024 in London.
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British Prime Minister Andy Burnham suggested this week that he could give British voters a chance to reverse the country’s highly controversial exit from the European Union a decade ago.
Mr Burnham, who became prime minister in the summer, told the BBC on Wednesday that a referendum on rejoining the EU could be included in a future election manifesto.
There are currently no plans to hold a general election in the UK until 2029. The Prime Minister could call an early snap election with parliamentary support, but Mr Burnham, who replaced his predecessor Keir Starmer without a referendum, has ruled out such a move.
In an interview with the BBC, the Prime Minister said a referendum was “not the right course of action at this time”, but added that Britain needed to “consider its options” regarding its relationship with the EU, arguing that “the current situation is not good enough”.
Asked if there was a chance there would be an in-out referendum in a future election manifesto, Mr Burnham said: “Yes, it is possible.”
Burnham was the mayor of Manchester during the last general election, when Mr Starmer led Labor to a landslide victory, ending 14 years of Conservative rule. Mr Burnham has vowed not to “restart” the debate over Brexit as he prepares to challenge Mr Starmer’s leadership.
In a separate interview with the BBC’s Today programme, Mr Burnham said he wanted to “consider options” for resetting Britain’s relationship with the EU.
Asked if he wanted Britain to rejoin the Union, he said: “We can stay as we are. If people think this is the right place to be, then that’s definitely an option.” “We could look at what[former Chancellor of the Exchequer]George Osborne said about a customs union, we could look at the single market, or we could go all in.”
The interview came after Mr Burnham gave a speech at the ruling Labor Party’s annual conference on Tuesday in which he said “Brexit does not give us control”.
The 2016 Brexit campaign promised to “take back control” of immigration, free up more funding for national health services and strike trade deals with the rest of the world.
Government figures show the value of UK exports of goods and services has increased significantly over the past decade, but immigration and NHS funding pressures are more controversial than ever.
Mr Burnham told Tuesday’s meeting: “There will be a UK-EU summit later this year.”
“Until we decide on our long-term relationship with what remains our largest market, we will not give Britain the clear path it needs for the rest of this century. We can honestly say that where we are now is not good enough. Brexit has done more harm than good (and) we need to restore Britain to higher levels of growth and prosperity.”
10 years of Brexit
On June 23, 2016, Britons went to the polls to vote on whether to remain in the European Union. That night, shocking results were revealed. Voters voted 52% to 48% to leave the EU.
Once the results subsided, the British pound slumped and London’s FTSE 100 fell. Prime Minister David Cameron, who called for a referendum and led the Remain campaign, has resigned.
The UK did not officially leave the EU until 2020. Meanwhile, the country’s impending exit from the EU remained a controversial issue, with so-called “remainers” staging mass protests against the decision and some political parties making vote reversal a central part of their campaigning.
After its relationship with its biggest trading partner was upended, Britain’s economy largely failed to recover post-Brexit, and the pound never returned to its pre-referendum levels. The country has also had a succession of prime ministers, with several of the seven leaders of the past decade ousted over their handling of Brexit and the economy after the referendum.
James Smith, a developed markets economist at ING, told CNBC that while Mr Burnham’s statement was politically important, tangible changes in trade relations would be needed to elicit any tangible economic upside, which could take years.
“The Prime Minister has opened the door to full EU membership, but in reality we face the same constraints that have prevented previous leaders,” he said in an email. “The public may agree that Brexit is not working, but it is not clear that a majority would support rejoining. It is also not at all clear how much the EU is willing to concede in negotiations, given the recent instability in UK politics and the possibility of a reform-led government in the future.”
Mr Smith pointed out that it took more than five years from the referendum to the new economic relationship with the EU.
“Now that[Brexit]has fallen down the list of political priorities among voters, I think it will take more time for the UK to settle into and implement a new type of relationship,” he said.
Steve Nolan, a senior lecturer in economics at Liverpool John Moores University, told CNBC on Thursday that some estimates suggest Britain’s gross domestic product is 5% to 8% lower than it would have been had there not been a vote to leave the EU.
“This should come as no surprise to economists. The standard model of trade says that creating barriers to trade with your nearest trading partner creates problems,” he said. “Therefore, while there are clear benefits to rejoining, the path to that outcome can be difficult.”
He added that a new referendum would increase uncertainty and confusion.
“Britain is also seeking to return to the club in a weakened bargaining position and may have to accept a number of conditions that could cause economic and political difficulties, such as euro membership and freedom of movement for workers. There is therefore an opportunity to seize, but not without a price.”
But Nigel Green, chief executive of London-based financial consultancy De Vere Group, said closer ties with Europe, while enriching Britain, would facilitate capital outflows.
“Sterling stands to benefit from a stable relationship with Britain’s biggest trading partner, and UK-focused stocks, which have been undervalued for a decade, could start to make up the difference,” he said.
But he warned that “open doors work both ways”, with entrepreneurs and senior professionals increasingly telling De Vere they were considering leaving the UK to avoid high tax burdens.
“An EU reset requires domestic twins: competitive taxes, faster planning and policy stability that allows businesses to look beyond the next budget,” he said. “If we get both things right, Britain will become a magnet for European capital. If we get just one thing right, Britain will be able to move away from more convenient countries.”
