Government finally acknowledges ‘severe’ economic impact of Brexit

'We are undoing some of that damage'

Ever since 2016, government after government has refused to specifically point to Brexit as a key reason behind many of the issues of the last few years.

But now, Labour seem ready to do exactly this.

READ NEXT: ‘I want to rejoin the EU… Brexit has been a disaster’ – Andy Burnham

Speaking to Sky News on Wednesday morning, chancellor Rachel Reeves said Brexit is partly to blame for the estimated £50bn blackhole in the economy that she is likely going to have to address at her autumn budget.

She said the Office of Budget Responsibility have "consistently overestimated" the UK's productivity, pointing to the impact of "austerity, Brexit and the ongoing impact of Liz Truss's mini budget."

"All of those things have weighed heavily on the UK economy," Reeves continued. “Already, people thought that the UK economy would be 4% smaller because of Brexit.

“Now, of course, we are undoing some of that damage by the deal that we did with the EU earlier this year on food and farming, goods moving between us and the continent, on energy and electricity trading, on an ambitious youth mobility scheme.

“But there is no doubting that the impact of Brexit is severe and long lasting and that’s why we are trying to do trade deals around the world, US, India, but most importantly with the EU so that our exporters here in Britain have a chance to sell things made here all around the world.”

The chancellor admitted she was looking at tax rises and spending cuts to address the black hole, but that she would not "duck those challenges."

"The numbers will always add up with me as Chancellor because we saw just three years ago what happens when a government, where the Conservatives, lost control of the public finances – inflation and interest rates went through the roof," she said.

A chancellor specifically mentioning the B-word as a reason behind the UK's struggles is refreshing, but it should never have taken this long.

As we've suggested previously though, perhaps Brexit could provide Keir Starmer with an electoral trump card that could reverse his political fortunes.