Labour steps up pressure over impact of Brexit deal on UK businesses

Sienna Rodgers
© Ilyas Tayfun Salci/

Labour is stepping up pressure on the government by exploring and highlighting the impact of Boris Johnson’s Brexit deal on UK businesses, while strengthening its alliances with sister parties in Europe, LabourList can reveal.

The opposition party today ran three sessions at its Spring Business Forum, where frontbencher hosts Rachel Reeves and Jack Dromey listened to businesses share their experiences of Brexit and last-minute preparations.

After holding a steady series of roundtables with different sectors, ranging from haulage and logistics to cultural industries, Labour is looking to hear from businesses and trade unions directly about the effects of Brexit.

Lucy Powell of Labour’s business team and Dromey of the shadow Cabinet Office team have asked Labour MPs to identify examples from their local areas of “post-Brexit challenges or opportunities for businesses and workers”.

They told colleagues: “Powerful case studies will be crucial towards holding the government to account for the damage they have inflicted on the economy or their failure to enable British businesses to reach their full potential.”

Reeves and Dromey also met with representatives of the Progressive Alliance of Socialists and Democrats – the S&D group of MEPs – last week, where they agreed on shared ambitions such as collective action to protect the planet.

They discussed the importance of keeping working relations between sister parties close post-Brexit, and agreed on their opposition to any move by the UK Conservatives to use Brexit to push down rights and standards.

Labour and members of the S&D group both said they were pleased that, following criticism from across the labour movement, Kwasi Kwarteng as the new Business Secretary recently cancelled a planned review of workers’ rights.

Responding to the Budget last week, Keir Starmer said Britain’s manufacturers “now face more red-tape when they were promised less” and financial services are “still waiting for the Chancellor to make good on his promises”.

Party insiders said the leader’s speech, which also cited the impact of the deal on fishing communities and artists, showed that Labour is “fully prepared to highlight the economic shortcomings of the government’s deal”.

Over the weekend, Reeves called on the Office for Budget Responsibility to produce an economic impact assessment of the deal, after the body found that the deal would see a loss of output UK economic output of 4% over 15 years.

When Labour MPs were whipped to vote in favour of the Brexit deal last year, the leadership maintained that the decision would not hold Labour back from criticising the government over the consequences

Reeves told Labour MPs at the time that the deal would be a platform for building on and that although the Tory deal may be bad for jobs and business, no deal – against which the party had consistently argued – would be worse.

Below is the full text of the letter from Lucy Powell and Jack Dromey to Labour MPs.

Dear colleagues,

Over the past two months, the Shadow Cabinet Office and Shadow BEIS Teams have met regularly with representatives of industry and trade unions to hear their assessment of the new trading arrangements between the UK and the European Union. The message has been clear: the government’s incompetent handling of Brexit negotiations and preparations has left many businesses swamped by red tape, bureaucracy and increased costs.

Labour voted for the government’s Brexit deal because it was better than no deal. Yet we also said that we would hold the government to account for the thin and limited deal they achieved and the impacts it would have on British businesses and jobs. We believe that our country can be successful, prosperous and competitive outside the EU and that our businesses can thrive, but the government has got to support British industry and jobs if we are to achieve the high wage, high skilled, green future we want to see rather than the race to the bottom many in government want to pursue.

The OBR confirmed last week that the UK’s economic output would shrink by 4% over the next 15 years as a result of the government’s Brexit deal. They also highlighted recent falls in UK exports and concerns that many businesses will have to open subsidiaries in the EU in order to circumvent the added costs and red tape of the government’s deal. Yet, there was not one mention by the Chancellor in last week’s Budget of what he would do to mitigate the impact of the new trading rules on businesses or what support measures he would put in place. Clearly, the government are in complete denial about the consequences of their deal.

It is vital that the concerns of those at the sharp end of the new trading rules are heard. The government promised there would be “no non-tariff barriers to trade” but colleagues will know all too well from discussions with local businesses, that this is simply not the reality for so many.

The government are turning their backs on business, and the problems they are having. In contrast, Labour has been engaging with business, to understand their concerns and to push government on solutions, including at our successful Spring Business Forum this morning.

Alongside this ongoing work at a national level, we would therefore welcome your support in identifying examples from your local area of the post-Brexit challenges or opportunities for businesses and workers. Powerful case studies will be crucial towards holding the government to account for the damage they have inflicted on the economy or their failure to enable British businesses to reach their full potential.

Please send any case studies to Jack’s office and we will be in touch if we require further background information.

As ever, on any other post-Brexit matters relating to businesses and jobs, don’t hesitate to get in contact with us in the Shadow BEIS or Shadow Cabinet Office teams and we will give every support.

Yours sincerely,

Jack Dromey, Shadow Minister for the Cabinet Office
Lucy Powell, Shadow Business and Consumer Affairs Minister

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