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Rachel Reeves has told how the Labour government discovered that it is not “dangerous” politically to try to undo some of the economic harm of Brexit. Before the General Election in July last year, Labour shied away from talking about Brexit, and the economic damage that it has done to the UK, amid fear of upsetting voters in the so-called “Red Wall” and other parts of the country. Even the Liberal Democrats partially adopted this strategy as they sought to woo Conservative-leaning voters. But after striking a new trade deal with the European Union in the spring, Ms Reeves said the Government found that voters did not see the agreement as a Brexit betrayal. Ministers gained confidence that they could talk about Brexit without “re-opening a can of worms” which so divided the country. Appearing on a panel of leading economic figures at a business summit in Riyadh, Saudi Arabia, the Chancellor was asked whether Brexit was a rejection of globalisation. “Brexit was a rejection of open borders,” she responded at the meeting where she also signalled that millions of households in the UK face tax rises in the Budget in November. “But if you look at the UK today when we did that deal back in May with the European Union to take down some of those barriers and indeed to introduce an ambitious youth mobility scheme, there was public support for that. “Actually, the worry perhaps that we had as a Government that re-opening that can of worms of our relationship with the European Union might be quite dangerous actually the response has been very good.” Ms Reeves added: “For businesses, especially small businesses, who have faced increasing red tape since we left the European Union, for workers who are now locked out of the jobs market in Europe, there are obviously huge benefits from rebuilding some of those relations. “But also inflation is too high in countries around the world including in the UK and one of the reasons for that is there is too much cost associated with trade with our nearest neighbours and trading partners.” Labour has made clear that the Government is not planning to rejoin the Customs Union, the Single Market or re-adopt free movement. But Sir Keir Starmer in May hailed a “landmark” new post-Brexit trade deal with the EU which the Government claimed will boost Britain’s economy by £9 billion by 2040. The agreement, some of whose details are yet to be finalised, included: * Easing trade rule to allow more UK exports of food to the Continent, and stop lorries full of produce being delayed at ports. However, it will mean Britain following EU rules on food standards which was slammed by the Tories as making the UK a “rule taker”. * EU countries allowing Brits to use eGates at airports, avoiding lengthy queues. * However, the Government made a significant concession on EU trawlers to fish in UK waters, replacing annual negotiations with longer time period of 12 years. * A “Youth Experience Scheme” for young Brits to be able to work on the Continent, and vice versa for EU citizens. The Conservatives and Nigel Farage’s Reform UK attacked the deal as a Brexit “surrender”. But the Government believes it has public backing for the reforms as it seeks to boost economic growth in Britain. Ms Reeves has also gone on the offensive, blaming Brexit, as well as the financial crash, for “very poor” productivity improvements in the UK. Mr Farage, a key architect of Brexit, has admitted it has failed but blames the Tory governments. The fiscal watchdog, the Office for Budget Responsibility, says Brexit is delivering a four per cent blow to Britain’s productivity. The Labour government, which has hit a record low in the polls of just 17 per cent, also struck the first trade deal with Donald Trump’s administration, as well as one with India. The Chancellor stressed her confidence that a trade deal with Gulf countries can be done quickly after she had ‘really good’ meetings in Riyadh about an agreement.
