FTI Consulting UK Public Affairs Snapshot – Brexit and Burnham: The UK/EU relationship 10 years on

On Monday 22nd June, Andy Burnham confirmed his intention to succeed the resigning Keir Starmer as Prime Minister. This latest development comes almost a decade to the day after British voters took the seismic decision to leave the European Union. Since then, the UK has witnessed a period of profound political volatility, which has seen five short-term Prime Ministers – all of whom, with varying success, have grappled with Britain’s relationship with the EU. Following the EU’s decision to postpone a summit with Britain next month, Burnham, with his own set of political beliefs and vested interests, will now be responsible for determining what a future dynamic will look like. 

It is first worth looking at how we have arrived here. With the years following the referendum spent relitigating the debate and haggling over the final ‘Brexit’ settlement, the resulting key milestones were: 

• 31 January 2020 – the UK formally leaves the EU and enters a transition period to negotiate long-term trading terms. 
  
• 31 December 2020 – the transition period ends, marking the conclusion of UK participation in the Single Market and Customs Union. 
  
• 24 March 2023 – the Windsor Framework, a legal agreement between the UK and EU, is adopted by both parties, with Northern Ireland remaining in the single market for goods. 

Unsurprisingly, a degree of fatigue then set in around the Brexit legacy debate. Yet despite the issue fading somewhat during the last general election, as weak growth has persisted, the argument over the nature of the UK’s relationship with the EU has steadily risen back up the political agenda. 

The economic legacy of the decision remains contested. Government figures indicate that, in the long run, exports and imports will be about 15% lower than if the UK had voted to remain – although these economic judgements are complicated by the devastating effects of the COVID-19 pandemic and the war in Ukraine. Brexiteers will also point to the poor administration of the departure process, and a failure to capitalise on the legislative agility the move granted the UK, with Kemi Badenoch recently citing the scrapping of VAT on energy bills as an example. 

The political picture also remains unresolved. Polling in June reports that 57% of people in Great Britain think the incorrect decision was made, whilst the UK’s largest employer lobby group has claimed that businesses do not want another vote on Brexit.  

This ambiguity has resulted in a resurfacing of the debate. In just the last few weeks, former Health Secretary Wes Streeting questioned Burnham’s “remain” credentials in the run-up to the all-important Makerfield by-election; the Liberal Democrats have launched a policy calling for a new Growth and Defence Partnership with the EU alongside a return to the Single Market and a customs union; and the Conservatives saw support seep away to Reform and Restore at the local elections in areas that backed Brexit in 2016. 

And so, back to Burnham, and what the odds-on favourite to take over as Prime Minister might do to deliver an improved relationship with Europe, governed by a manifesto that he didn’t campaign on. The party’s positions included red lines on a return to the Customs Union, the Single Market or freedom of movement. Burnham will be keen not to spook Reform voters and has promised not to ‘re-run’ Brexit arguments – despite admitting in September he would like to see the UK back in the EU in his lifetime.  

However, affinity for the EU is key to the wing of the party that he aligns with most closely, and he will recognise the economic potential of a stronger trading bond. While officials do not believe that Burnham would substantially change the shape of ongoing negotiations, in practice this will depend on how political realities develop over the coming years.  

In particular, a Burnham-led Cabinet may well see ardent “Remainers” in prominent roles. Streeting’s declaration of support for Burnham’s candidacy could see him take on the role of Foreign Secretary or even Chancellor of the Exchequer. He has publicly stated that conversations with the Makerfield MP have convinced him there will be a place for a new ‘Special Relationship’ with Europe. 

He is also likely to progress Starmer’s European Partnership Bill, which aims to strengthen ties on trade, energy and regulation, and alignment with EU standards on food, electricity trading and carbon emissions. He will have to contend with the Business and Trade Committee’s recent assessment of the UK’s renewal of relations with the EU, that concluded that delivery has fallen well short of ambition, with the previous ‘EU Reset’ projected to add just 0.5% to UK GDP by 2040. 

As we enter the second post-Brexit decade, the ongoing challenge remains clear. Despite the wrangling of the last 10 years, there remains significant political will required to achieve a positive settlement with the EU, regardless of who is in Downing Street.