The pro-EU camp aren’t living in the real world

Thanks to Rachel Reeves’s piece in the Sunday Times this morning we can now say with confidence that Britain’s sluggish economic growth has absolutely nothing to do with her: not her job-destroying hikes in employers’ National Insurance, not her government’s Employment Rights Act, not the public debts which cost taxpayers £109 billion in interest payments last year alone. No, it’s Brexit wot damaged the economy. As she writes: ‘Brexit has made us poorer, weaker and less secure.’

Reeves doesn’t cite the evidence for this assertion, although she would have plenty of think tanks to draw upon if she were pressed. There’s the NIESR, for example, which claims that Brexit has reduced the size of the UK economy to the tune of five to six per cent relative to where it would now be were we still in the EU. Or there is the CEPR, which puts it at six to eight per cent. And don’t forget Sadiq Khan’s economists at the Greater London Authority who claim we are ten per cent worse off.

There is one problem with these modelled scenarios: they don’t quite seem to align with the real world There is just the one problem with these modelled scenarios: they don’t quite seem to align with the real world. Anyone tempted to swallow this sort of stuff risks choking on a large, France-shaped problem. France, with a similar-sized population and economy to Britain’s, is the closest comparator that Britain has within the EU. If Brexit has damaged the UK economy, then surely economic growth this side of the Channel since Brexit should have underperformed that on the other side.

But it hasn’t. There are various ways of comparing GDP across countries, but let’s start with straightforward GDP, in dollar terms at current prices (not adjusted for inflation), using IMF data. Between 2019 and 2025 the UK economy grew by 38.8 per cent and the French economy by 24.2 per cent. GDP per capita? Over the same period the UK economy grew by 33.1 per cent and the French economy by 21.3 per cent. Finally, let’s look at GDP per capita adjusted for Purchasing Power Parity, which takes into account the cost of living in different countries.

Between 2019 and 2026, this grew in France by 29.9 per cent and 29.6 per cent. Most popular Toby Young Why we shouldn’t try to ‘kill’ AI Gavin Mortimer One look at France should cure Reeves of her wish to rejoin the EU Ioannes Chountis de Fabbri The true lesson of the Suez crisis There is no real-world measure you can pick which suggests that the UK economy has underperformed the French economy by any substantial degree since Brexit, and much to suggest we have done a little better.

Therefore, those who continue to claim that Brexit has damaged the UK economy are asserting either that the UK economy would have soared ahead of that of France had it not been for Brexit, or that the French economy has been harmed by Brexit at least as much as the UK economy. Neither of those seem a likely explanation, which leaves the possibility that the modellers at all these pro-EU think tanks are wrong. Their models are simply reflecting their own prejudices, which hold that Brexit was a terribly bad idea, and that Britain must therefore have suffered as a result.

They are modelling only the negative effects of Brexit – such as the greater friction in cross-Channel trade – without taking into account the possibility that there could possibly be any benefits, such as escaping the worst of Donald Trump’s punitive tariffs, the ability to do our own trade deals with India, etc, and the greater freedom to make progress in certain industries, such as AI and gene-editing which are being crushed by EU regulation.

Reeves, like so many in the pro-EU camp, live in a world of these models, which they seem to prefer to the real world (although Reeves, at the same time as bleating about Brexit having destroyed UK growth is also boasting this morning that the UK currently has the highest growth in the G7). In truth, economic growth in the UK has hardly been great since Brexit, nor indeed since the 2008/09 financial crisis. We are locked into a cycle of low-growth, as indeed are France, Germany and most of Western Europe.

This should come as no surprise because we have not really used the freedoms of Brexit to diverge from the European social democratic model. Nor are we likely to so long as Reeves’s party remains in power.