What Will Happen to the UK’s Economy if Great Britain Rejoins the European Union?
Ten years ago, on the 23rd June 2016, Great Britain voted by 51.89% to 48.11% to leave the European Union (EU), and Brexit* became official. Shortly after, the Prime Minister David Cameron, a leading voice for staying in the Union, resigned from the office. However, the politics of Brexit are changing, with polls revealing a majority of the UK population wish to return to the EU, along with many politicians, who are openly voicing their commitment to re-establishing closer bonds with the EU if not returning.
However, experts confirm that the United Kingdom’s former partners across the English Channel have made life as difficult as possible for companies in the UK doing business with them, and no doubt re-entering the bloc would not be an easy task. A number of expert analysts within this arena have said that even if the UK were to undergo a full partnership status, reversing everything Brexit stood for, it would restore only just over 50% of lost output that was lost by leaving the EU.
Experts suggest that a plus for the UK economy would be from joining the single market for goods, though Brussels has already rejected this option out of hand. Other possibilities include a Switzerland-style agreement based on a tailor-made package of interlocking trade deals, or rejoining the EU Customs Union to secure tariff-free trade. However, the recently resigned UK Prime Minister, Keir Starmer, has repeatedly confirmed that the government will not pursue the “red line” freedom of movement, a customs union with Brussels, or single market access.
However, despite his recent rhetoric, the Prime Minister in waiting, Andy Burnham, according to experts, is an ardent anti-Brexiteer. As Keir Starmer’s government had begun to test the aforementioned red lines, it will be interesting to see where the labour government will go under his leadership. Indeed, officials in the UK have recently promoted legislation that experts suggest could be steps towards a Swiss style arrangement, with Brussels under the auspices or process known as “Dynamic alignment”*. This process allows the UK to adopt new EU regulations without a vote in parliament let alone being put to the country as a whole.
*Dynamic alignment – Is heavily tied to UK – EU trade and border arrangements and in the context of the United Kingdom, this is a legal and regulatory mechanism where the UK agrees to keep its domestic laws and standards continuously updated to match EU regulations. Unlike a static agreement where the EU and UK would have to renegotiate every time a new rule is introduced, rules automatically adapt as EU rules evolve under dynamic alignment.
*It is designed to ensure a level playing field for trade and allow goods such as agri-food products and electricity to cross UK – EU borders with minimal friction. Interestingly and ironically, the Brexit supporting policies of former Prime Minister Boris Johnson controversially used/invoked dynamic alignment in 2019 to speed up the process of the UK’s withdrawal from Europe.
Few can deny that over the last decade, Brexit has cost Britain. For the first sixteen years since 2000, the economy of the UK grew faster than France, Spain and Italy. However, according to data released from the UK’s ONS (Office of National Statistics), growth for the last eight years in the UK has been slower than France and half as fast as Spain and Italy. Many studies on growth have varied widely from a loss of 1.00% up to 8.00% with the BOE (Bank of England) pitching in at circa 3.50%. Indeed, trade with Europe had been on an upward trend before 2016, official data released show that compared with 2019, in 2025 imports from the EU were down 10% and exports were down 14%.
Some experts argue that rejoining the customs union or going for a Swiss-type deal will reduce some trade frictions, but the economic benefits will be much smaller. A full Brexit reset i.e., rejoining the EU as a full member they argue, would give a long-term boost to the economy reversing the estimated 2.00% – 8.00% loss in GDP (other estimates are a recovery of 50% of losses), remove all non-tariff trade barriers, massively boost business investment, and eliminate customs paperwork. Furthermore, analysts advise that over the long-term the UK should be able to recoup much of the £30 Billion in lost tax revenue since leaving the EU.
Rejoining the EU as a full member would require the UK to abandon all of its strict “red lines.” It would mean accepting single market access, the customs union, and the free movement of people across reopened borders. However, this could be a very tough sell politically, especially given the current public and political backlash in the UK surrounding immigration and border control.
Furthermore, experts argue the UK would have to ditch the pound in favour of the Euro, which Gordon Brown, the Chancellor of the Exchequer in the era of the Blair Labour government fought very hard for the UK to keep. The UK would have to adopt all EU laws, rules and regulations, and once again would have to kowtow to Brussels on a regular basis. Although the UK had previously negotiated a free membership fee of the EU, this time around the country would have to pay an estimated gross annual membership fee of £22 billion to £31 billion.
