Tory peer hits back at Chancellor in Brexit row ahead of Budget.
Chancellor Rachel Reeves (Image: Getty)
A Brexiteer accused Rachel Reeves of “talking nonsense” in a row over Britain’s exit from the European Union. The Chancellor defended Labour’s push for closer ties with Brussels as she partly blamed Brexit for the UK’s economic woes.
She said the Office for Budget Responsibility would be “pretty frank” about the impact of Britain’s departure from the bloc. Her comments come ahead of next month’s Budget when further tax hikes are widely expected.
Ms Reeves told the Regional Investment Summit in Birmingham: “We also know – and I think the OBR are going to be pretty frank about this – that things like austerity, the cuts to capital spending and Brexit, have had a bigger impact on our economy than even was projected back then.
“That’s why we are unashamedly rebuilding our relations with the EU to reduce some of those costs that in my view were needlessly added to businesses since 2016 and since we formally left a few years ago.”
She added: “The Budget will continue to focus on growth. I recognise that businesses have absorbed tax increases and other challenges over the last year, the geo-political uncertainty, the higher barriers to trade. I want to make sure this Budget is pro-growth whilst also addressing the deep challenges we face in ensuring we’ve got stability in our economy.”
But former Brexit minister Lord Frost insisted the state of Britain’s economy is “entirely the responsibility of the Labour government”.
He wrote on X: “Reeves is talking nonsense. The EU reset is being pursued for entirely political reasons.
“The Government’s own figures purport to show that its craven and unnecessary renegotiation will increase GDP growth by 0.02% annually – a £9billion increase in 15 years’ time. A rounding error on a rounding error.
Lord Frost was Boris Johnson’s chief Brexit negotiator (Image: Getty)
“To be balanced against the losses coming from accepting another party’s regulations without any say in them, the extra energy costs that come up with a higher carbon tax, the direct fiscal cost of paying to be subject to EU rules, and much else.
“Just as the so-called 4% hit to future productivity is nonsense, so is the idea that the reset does anything to improve the economy.
“The collapse in economic expectations over the last year is entirely the responsibility of the Labour government. No one else.”
It comes as the Chancellor is widely expected to unveil major tax hikes at her Budget next month.
