Pro-EU protesters demonstrate outside Parliament against Brexit on the fourth anniversary of Britain’s official departure from the European Union, in London, January 31, 2024.
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British Prime Minister Andy Burnham suggested this week that British voters may have the chance to reverse Brexit, the country’s highly controversial exit from the European Union a decade ago.
Burnham, who became prime minister this summer, told the BBC on Wednesday that it was “possible” that a referendum on EU re-membership would be included in a future election manifesto.
A general election in the UK is currently not expected until 2029. Prime ministers are able to call an early election with the support of Parliament, but Burnham – who replaced his predecessor Keir Starmer without a public vote – has ruled out such a move.
In his interview with the BBC, the Prime Minister said a referendum “would not be the right thing to do at the moment”, but added that the UK needed to “consider options” for its relationship with the EU, arguing that “the situation we find ourselves in is not good enough”.
Asked if an in-out referendum in a future election program was a possibility, Burnham replied: “Yes, things are possible.”
In the previous general election – which saw Starmer lead the ruling Labor Party to a landslide victory and end 14 years of Conservative rule – Burnham was mayor of Manchester. As he prepared to challenge Starmer’s leadership, Burnham pledged not to “reignite” the Brexit debates.
In a separate interview with the BBC’s Today programme, Burnham said he wanted to “look at options” for resetting the UK’s relationship with the EU.
“We could stay as we are. That’s certainly an option, if people think it’s the right place to stay,” he said when asked if he wanted Britain to return to the union. “We could look at what (former finance minister) George Osborne said about a customs union, we could look at… the single market or we could go all the way.”
The interviews came after Burnham’s speech to the ruling Labor Party’s annual conference on Tuesday, in which he said “Brexit has not given us control”.
The 2016 Brexit campaign promised to “take back control” of immigration, free up more money for the country’s health service and strike trade deals with the rest of the world.
While the value of Britain’s exports of goods and services has increased significantly over the past decade, government figures show, funding pressures for immigration and the NHS are more contentious than ever.
“Later this year there will be a UK-EU summit,” Burnham told the conference on Tuesday.
“We won’t give Britain the clear path forward it needs for the rest of the century until we decide on a long-term relationship with what remains our largest market. I can’t tell you in all honesty that where we are is good enough. Brexit has done more harm than good (and) we need to restore a higher level of growth and prosperity to Britain.”
A decade of Brexit
On June 23, 2016, Britons went to the polls to decide whether or not they wanted to remain in the European Union. A shock result emerged that evening: voters had voted in favor of leaving the bloc by 52% to 48%.
As the result sank, the pound crashed and London’s FTSE 100 collapsed. Then-Prime Minister David Cameron – who called the referendum and led the Remain campaign – resigned.
Britain only officially left the EU in 2020. In the intervening years, the country’s impending exit from the bloc remained a contentious issue, with so-called “Remainers” staging huge protests against the decision and some political parties placing the vote reversal at the heart of their election campaigns.
Britain’s economy largely failed to gain post-Brexit momentum after ties with its largest trading partner were severed, and sterling never returned to its pre-referendum level. The country has also seen a rapid succession of prime ministers, with some of the seven leaders in the last decade ousted because of how they handled Brexit and the post-referendum economy.
James Smith, developed markets economist at ING, told CNBC that while Burnham’s statement is politically significant, unlocking tangible economic potential relies on concrete changes in trade relationships, which could take years.
“Although the Prime Minister has opened the door to full EU membership, the reality is that he faces the same constraints that have held back previous leaders,” he said in an email. “The public may agree that Brexit did not go well, but it is not clear that there will be a majority in favor of rejoining. It is also not at all clear to what extent the EU will be willing to give ground in negotiations, given the recent volatility in British politics and the possibility of a Reform-led government in the future.”
Smith pointed out that it had taken more than five years to move from the referendum to a new economic relationship with the EU.
“I suspect it will take a lot longer for Britain to settle down and implement a new form of relationship now that (Brexit) has relegated it to the bottom of voters’ list of political priorities,” he said.
Steve Nolan, a senior lecturer in economics at Britain’s Liverpool John Moores University, told CNBC on Thursday that some estimates suggest the U.K.’s gross domestic product was 5 to 8 percent lower than it would have been without the vote to leave the EU.
“This was no surprise to economists: Standard trade models say that if you set up trade barriers with your closest trading partner, it will cause problems,” he said. “There are therefore clear benefits to be gained from re-joining, but the path to this outcome could be strewn with pitfalls.”
Any new referendum would increase uncertainty and unrest, he added.
“The UK would also seek to rejoin the club while it enjoys a weakened negotiating position and may have to accept many conditions – (such as) euro membership and free movement of workers – which could lead to economic and political difficulties. So there are opportunities to be had, but they will not come without a cost.”
However, Nigel Green, CEO of London-based financial consultancy DeVere Group, said that while closer ties with Europe would make Britain richer, it would also make it easier for capital to flow out of the country.
“The pound stands to gain from a more stable relationship with the UK’s biggest trading partner, and UK stocks, priced at a discount for a decade, could start to narrow the gap,” he said.
But he warned that “an open door works both ways”, with entrepreneurs and senior executives increasingly telling DeVere they were considering leaving the UK to avoid a high tax burden.
“The EU reset needs a national twin: competitive taxes, faster planning and political stability that allows businesses to look beyond the next budget,” he said. “Get both right and the UK becomes a magnet for capital in Europe. If you get just one right, Britain becomes a more convenient place to leave.”
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