![Many of Sir Keir Starmer's MPs would like him to reset relations with the European Union](/https/www.telegraph.co.uk/content/dam/politics/2024/08/04/TELEMMGLPICT000386046939_17227949570250_trans_NvBQzQNjv4BqhasgUMiR-rxiRxu9qBoVLdUcsNjZWwQQAqx2KspIOLE.jpeg?imwidth=680)
Britain’s economic growth ‘does not depend on EU’
Keir Starmer must take ‘full advantage’ of Brexit and resist calls to rejoin single market, says former No 10 adviser
![Many of Sir Keir Starmer's MPs would like him to reset relations with the European Union](/https/www.telegraph.co.uk/content/dam/politics/2024/08/04/TELEMMGLPICT000386046939_17227949570250_trans_NvBQzQNjv4BqhasgUMiR-rxiRxu9qBoVLdUcsNjZWwQQAqx2KspIOLE.jpeg?imwidth=680)
Britain’s economic growth does not depend on the European Union, a leading economist has warned.
Dr Gerard Lyons said the new Prime Minister must resist siren calls to rejoin the bloc’s single market and instead take “full advantage” of Brexit.
In a research paper he said pro-EU voices had “overstated” the benefits of membership and Labour would be better off focusing on domestic challenges.
His remarks came after Sir Keir promised a “reset” of relations with Europe, which includes making upgrades to the Boris Johnson-era trade deal.
Sir Keir has said he wants to strike an agri-food deal with Brussels that would ease border checks but also require alignment with EU rules.
He also hopes to secure an agreement on recognition of professional qualifications, but the EU is likely to ask for free movement for under-25s in return.
Many of his MPs would like Sir Keir to go further and see the reset in relations as a first step towards rejoining the bloc.
![Dr Gerard Lyons said rejoining the EU will not provide a solution to the UK's growth challenge](/https/www.telegraph.co.uk/content/dam/politics/2024/08/04/TELEMMGLPICT000205951388_17227952566740_trans_NvBQzQNjv4BqpVlberWd9EgFPZtcLiMQf0Rf_Wk3V23H2268P_XkPxc.jpeg?imwidth=350)
Dr Lyons, who advised Liz Truss when she was in No 10, urged the Prime Minister to rebuff those calls and turn his focus to domestic problems.
In a paper for the Centre for Policy Studies, he wrote: “The Government needs to have the confidence to stand its ground on remaining outside of EU institutions.
“Rejoining the EU, its single market or its customs union will not provide a solution to the UK’s growth challenge and should not be part of any pro-growth strategy, despite the recent clamour from some for this.
“The major challenges facing the UK have long predated Brexit and solutions are not reliant on being in the EU.”
Dr Lyons said that a shortfall in international investment, which has long been identified as a key weakness of the economy, pre-dated joining the EU.
He added that the trade deficit problem, in which the country imports far more than it exports, developed in the 1980s while the UK was a member.
The economist said much of the clamour for Britain to rejoin the single market was “based on a misunderstanding of our underlying growth issues”.
“Our future relationship with the EU must be based on an accurate assessment of the current situation, not wishful thinking,” he said.
“That is not the situation we find ourselves in. Britain voted to leave and we need to take full advantage of the trade and regulatory opportunities that are now available to us.”
‘Economically damaging narrative’
Dr Lyons also criticised previous Tory governments, saying they had failed to “deliver a properly thought-out post-Brexit economic policy”.
He said their failure to capitalise on leaving the EU had “helped to create an economically damaging narrative about the UK on the global stage”.
Sir Keir has repeatedly ruled out rejoining the single market or the customs union, or allowing a return to freedom of movement.
That pledge was contained in Labour’s manifesto and he has said they are “red lines” he will not cross in the pursuit of a better trade deal with Brussels.