Labour Market
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of increases in levels of UK-EU alignment on UK labour markets.
Answered by Lucy Rigby
Integrated markets tend to be more competitive. Businesses typically respond by becoming more innovative and efficient, workers gain from higher productivity, allowing wages to rise, and consumers gain from lower prices.
Leaving the EU increased costs for businesses and consumers, shrank markets for UK exporters, and left our strategic industries exposed. Since March 2020, the OBR has maintained its estimate that productivity will be 4% lower in the long run than it would have been had the UK not withdrawn from the EU. Recent independent studies indicate its GDP impacts could be as much as 6% to 8%.
Aligning UK and EU regulations can reduce some of these frictions, enlarging the market for UK firms, supporting growth in trade and the jobs linked to it.
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