UK-EU Customs Union

Lord Moynihan of Chelsea Excerpts

Thursday 29th January 2026 Lords Chamber

[Lord Moynihan of Chelsea (Con)]

My Lords, earlier speeches today have claimed with a straight face that had we not left the EU, our GDP would now be 4% or 8% larger than it is now. The OBR, which was named by the Sunday Times this week as the UK’s joint worst forecaster, has embraced that analysis. Yet our economy has managed the same, admittedly low, growth rate as the three key EU economies: Germany, France and Italy. The belief that we would have grown 8% more than those three had we stayed in the EU is, frankly, nonsensical.

The claims come from a doppelganger analysis which asserts that we are 62% identical to the US so we should have grown just as quickly as the US has. We have stifled building, driven the rich away, discouraged tourists, ballooned the obstinately unproductive public sector, medicalised anxiety and made not working pay more than getting a job. We entered into the disastrous net-zero experiment, while the US has provided abundant cheap energy—the essential precondition for economic growth. Yes, if we had done what the US did, our economy would be at least 8% larger than it is now. But we did not, so it is not. Net zero has decimated our manufacturing industry. Petrochemicals, ammonia and pharmaceuticals have all shrunk dramatically, with plants closed and manufacturing moving offshore. Goods exports are therefore indeed down, because there are fewer goods to export. We do not make them any more.

Exports of services, however, are growing rapidly—over 20% in the last two years. That would have been impossible had we stayed in the EU, where digital services, for example, are stifled by inflexible data regulation. It could be worse for us, we could have stayed in the EU, costing us far more per week than the £350 million on the side of the bus, retaining the EU’s high tariffs with the rest of the world, adopting the tens of thousands of new regulations and directives passed since we left, a 15% US pharmaceuticals tariff instead of our 0%, 50% on steel and aluminium rather than 25%, and no superior trade deals with the US, Japan, India, South Korea or, above all, the Pacific partnership.

To believe we would have had faster growth were we still in the EU is—forgive me—seriously delusional. As for wholly or partially rejoining or dynamic alignment, the EU would undoubtedly demand costly retrospective contributions to its recovery and resilience facility and withdrawal, as many noble Lords have said, from our many valuable, recently signed trade deals.

The UK will fare far better outside the EU. We were told at the time of the referendum that the City would die if we left the EU. It has not, and now the City wants to stay out. Our digital economy will never flourish under the EU’s crippling digital regulations. Our rapidly growing trade with the US will wither under extra imposed tariffs. There is plenty we could do to grow our economy faster. Relinking to the EU is not one of those things.