Euro creep: what the government can’t admit

Chancellor Rachel Reeves has a whole litany of excuses for the dire state of the economy and why, supposedly, she needs to put up taxes. And up there at the top of the list is, predictably, Brexit.

She and Keir Starmer are doing everything they can to undermine the 2016 referendum result, short of actually calling another referendum. Starmer is busy negotiating the so-called “reset” with Brussels. This will involve handing billions to the EU while losing sovereignty over swathes of the economy.

Betrayal

And the only way to attempt to justify this betrayal is to claim that Brexit is ruining Britain. Any argument will do. We have been told productivity is failing…due to Brexit.

As former Brexit minister David Frost recently pointed out, “Successive governments and the public sector economist blob have argued repeatedly since 2008 that British productivity is about to pick up again, and repeatedly been proved wrong. Now it seems they will finally acknowledge reality – and justify it with the convenient excuse of Britain’s exit from the EU.”

Fanciful

But their reasoning is fanciful, based on zombie statistics – a useful term defined by Wiktionary as “a piece of information frequently cited by experts and institutions, despite having no basis in research or reality.”

The Office for Budget Responsibility (OBR) is seen as the fount of all economic knowledge. But it is as prone to error as the rest of the financial establishment. In November 2024, for example, it admitted that it had overestimated public sector financial liabilities by £18 billion.

Productivity

The OBR estimated before the referendum that leaving the EU would result in a permanent hit to UK productivity of 4 per cent. In March 2023 it said it stood by those estimates.

The trouble is that those estimates are just that – estimates. Worse, the OBR arrived at the figure of 4 per cent by taking an average of 13 models, only four of which were above 4 per cent. The highest was from the World Bank, not known for its accurate forecasting. It said the hit would be 10 per cent.

Unsubstantiated

These unsubstantiated figures of Brexit-induced productivity loss (losses, as Frost said, that were there way before Brexit) are now being used – and will be used repeatedly – to justify the cost of bringing the British economy back under the control of the EU. And no surprise, the government is keeping quiet about the cost of the Brexit reset, which will be real.

‘The EU has made its ambitions clear: it wants billions of pounds.’

The EU, on the other hand, has made its ambitions clear: it wants billions and billions of pounds. The government, keen to extort billions from the British people in the budget, is understandably not keen to have headlines about billions being siphoned off to Brussels. It might – heaven forbid – give the impression that taxes are rising because the government wants to snuggle up to the EU.

What’s more likely is that the payment to the EU will never appear as one sum. It will be attached as a separate item to everything that Britain agrees to. One payment for rejoining the Erasmus student scheme, one for joining the EU’s electricity trading scheme, another for the agri-food agreement. And so on.

Mystery

Why Britain should pay to rejoin Erasmus at all is a mystery. At its height in 2018/2019, according to official EU statistics, 17,955 British students and trainees used it to spend time in the EU. That compares with 29,805 coming into Britain from the EU. It’s clear who should be paying whom.

Yet in August the Department for Education alerted contractors to the likelihood of a £20 million contract just to run the scheme. That cost would be dwarfed by the actual cost of subsidising EU students coming to Britain – estimated by the government in 2021 to be £2 billion over seven years.

Crazy

The price tag for signing up to EU regulations on food and farming is not known, but the scope of the impact is starting to become clear. In November it was revealed that oatcakes made with British oats could be banned from sale, crazy as that might seem.

Nor has the bill for joining the EU electricity market been publicly discussed – although it is clear that the EU will want money. And the Daily Telegraph reported in November that the government is set to sign up to the EU’s net zero policies by linking up emissions trading schemes.

Price hike

Quite apart from other considerations, such a move could raise prices from gas-fired power stations – which generate 30 per cent of Britain’s electricity – and hike consumers’ bills by £112 a year.

The cost of being part of the EU’s war economy, though, is taking shape. According to news site Politico, the EU is to demand between 4.5 and 6.5 billion euros for us to be part of the EU’s rearmament scheme named ironically, SAFE.

Summit meeting

All these discussions and negotiations were set in train six months ago with the UK/EU summit meeting on 29 May – the first since Britain left the EU. The joint statement issued after the summit talked ominously about “our shared values and our commitment to deeper cooperation”, and on what it called “the need to develop an ambitious, dynamic relationship”.

‘The government is keen not to appear to be sabotaging Brexit and paying billions to do so.’

In plain English, the summit discussed sabotaging Brexit. But the government is so keen not to appear to be doing so, and not to be paying the billions that it will eventually be paying, that progress has been slow. Painfully slow for Downing Street and Brussels. The political will is there, but both Westminster and Brussels are strapped for cash.

Matters may be moving more swiftly now, following a telephone call on the evening of Wednesday 12 November between Starmer and EU Commission chief Ursula von der Leyen. No official statement on the call has come from Downing Street, but von der Leyen posted on X that that the two “reiterated commitment to our renewed agenda”.

‘Mutually beneficial’

She also revealed that negotiations on trade in plants and animals (see Workers, November/December 2025) and the electricity trading scheme would get going the following week. And in a nod to the row about SAFE, she said blandly that “we agree to continue the work together to achieve a mutually beneficial outcome”.

The difficulty for opponents of the government’s planned surrender to the EU is that it will not all be sewn up in a single summit or treaty. As noted earlier, the government is keen to avoid any mention of the total cost of the “reset”. Likewise – as explained by the House of Lords (pro-EU) European Affairs Committee in November 2025 – the reset is a process, not a single event.

Back in

In other words, Britain will creep and shuffle back to the EU in stages, none of them sufficient – they hope – to cause mass outrage. But at a certain point the establishment will turn around and say Britain is as good as back in.

All those who fought for Brexit, all those who care about Britain’s independence, should take note. Brexit is being stolen. It’s time to fight back.