Significant new analysis demonstrates how the Labour Government can achieve its growth mission, with benefits spread across the nations and regions of the UK, all while staying within the Prime Minister’s stated red lines for the UK’s relationship reset with Europe.
The landmark new research published today was commissioned by Best for Britain and undertaken by Frontier Economics. It models the impact of greater EU-UK regulatory alignment on the UK economy along with the impact of external factors - specifically, the effect of potential new import tariffs imposed by the USA.
The independent study found that the UK Government can secure significant growth (1.7% to 2.2%) through a policy of deep alignment in both goods and services with the EU while alignment on goods alone can also drive growth (1% to 1.5%). Significantly, alignment on goods offers disproportionate economic dividends for areas outside London with largest growth in this scenario projected in the West Midlands, East Midlands, North East and Yorkshire. And it’s not just a boon for the UK. In monetary terms, alignment delivers similar growth in exports for the EU ($29.7bn) as for the U.K. ($32.9bn). In the scenario of US tariffs being applied, deep alignment between the EU and UK shields the EU by offsetting some of the lost US trade with friction free UK trade.
Closer regulatory alignment will not only save costs for British and EU businesses, over time, this could help the UK recover between a quarter and a half of the economic hit of Brexit to UK GDP, which the OBR had calculated at -4%. In the shorter term, the growth effects are around double the government’s 2019 upper estimates of the effects of a UK-US Free Trade Agreement. The proceeds from such growth could also be used to finance much needed public investments - for example, close to two years of the Government’s desired increases to the NHS capital budget.
The results suggest that the boost to the UK economy provided by a closer trading relationship with the EU could be 10 times larger than the combined effect of the post-Brexit trade deals signed with Australia and New Zealand, which are together expected to deliver a mere 0.1% over the next ten years.
|
Scenario |
Effect on UK GDP |
|
Deep UK-EU regulatory alignment in goods, weak in services |
1% to 1.5% |
|
Deep UK-EU regulatory alignment in goods and services |
1.7% to 2.2% |
Supporting this groundbreaking research, a massive new poll and MRP analysis of nearly 15,000 people undertaken by YouGov on behalf of Best for Britain found that support for alignment with EU standards and regulations was the most popular option in all but two constituencies in Britain (Castle Point and Clacton).
Two in five (41%) said the UK should be more closely aligned with the EU with one in five saying they either; favour the status quo (19%), think the UK should be less closely aligned with the EU (22%) or that they don’t know (18%).
The poll also found that in every seat in GB bar one, the most popular option was for the UK to improve trade access with the EU even if it required the UK to follow some specific rules, standards, and regulations. In Farage’s Clacton seat, the results are extremely close with 42% opposing and 39% supporting. In topline polling numbers this means a majority (54%) of British voters would be willing to follow some EU rules, standards and regulations to improve trade access, almost double the number who would not (29%) .
Amazingly, the poll also found that in 426 constituencies (67%) across England, Scotland and Wales, the most popular option was for the UK to improve trade access with the EU even if it required the UK to follow all specific rules, standards, and regulations.
Across the country, more voters would be willing to follow all EU rules (44%) compared to those who would not (38%).
The Government’s electoral coalition is far more supportive of closer relations with the EU than the average Brit. Of those who voted Labour at the last election, three in five (64%) say the UK should be aligned more closely with EU standards and regulations, only 7% do not. Crucially however, voters who supported the Conservatives in 2019 and switched to Labour in 2024, sweeping Keir Starmer into Number 10, are twice as likely to say they support the UK aligning with EU standards and regulations compared to those who say they don't (42%to 18%). Only 29% say the current relationship is about right, and 11% don’t know.
Those who voted Labour at the last election are also less concerned about the UK following EU rules and regulations. Of those who voted Labour at the last election, three quarters (76%) would support the UK improving trade access with the EU even if it required the UK to follow ‘some specific’ rules and regulations. Only 11% are opposed. A majority (55%) of voters who supported the Conservatives in 2019 but switched to Labour in 2024 say they would support a better trading relation with the EU, even if the UK was required to follow some specific EU rules and regulations in return. Only 30% oppose.
Two thirds of people who voted Labour at the last election (66%) would go as far as supporting the UK improving trade access with the EU even if it required the UK to follow ‘all’ EU rules and regulations. Only one in five (20%) are opposed.
Campaigners are calling on the Government to commit to the popular policy of beneficial regulatory alignment to boost economic growth across Britain, remove costly red tape for businesses and avoid passive divergence.
Naomi Smith, Chief Executive of Best for Britain, said,
“No other policy proposal or infrastructure investment has the potential to move the economic dial on this scale in this timeframe. It not only falls within the Prime Minister’s stated red lines for his Brexit reset, but appeals to the voters he won from the Conservatives at the last election and whose support he needs to keep.
“Deeper regulatory alignment with our largest market offers growth to every corner of the UK and is the change Britain has been waiting for. Voters want it, businesses need it, the time is right for the Government to commit to it.
Andrew Lewin MP, Chair of the cross-party UK Trade and Business Commission, said,
“The Labour Government is the first in more than a decade with a stated aim of negotiating a stronger and closer trading relationship with our allies in the EU. This timely new report shows the opportunity on offer, with an uplift to our economy worth tens of billions of pounds and benefits flowing to all parts of the country.
“The Chancellor was right to say that when faced with policy choices about how we grow the economy, the answer can’t always be no. Now is the time to say yes to closer regulatory alignment with the European Union and start to undo the damage done by the failed deal of the last government.”