George Osborne
George Osborne argued that Britain must maintain close relationship with Europe. The Andrew Marr Show/BBC

George Osborne has labelled Brexit the "greatest act of protectionism" in Britain's history as he urged the government to maintain a close relationship with Europe.

Appearing on BBC's The Andrew Marr Show on Sunday (18 December), the former Chancellor of the Exchequer reflected on his time in Downing Street and the decisions David Cameron and he made in the run-up to July's EU membership referendum.

He said he accepts the majority of voters wanted to leave the EU, but said now that decision has been made, Britain should maintain its relationship with its closest trading partners.

Osborne said: "All of the forecasts, including the government's own independent forecast, show that the economy is going to slow next year, but I'm interested in the future.

"And what the future tells you at the moment, and what financial markets tell you today, is that every time they think Britain is going to have a less close relationship with our trading partners in Europe – every time there's a hint from the government or a government minister says something like that – then the pound falls and in effect, the world is betting against Britain.

"Every time you have thoughtful contributions from members of the government saying, 'Well actually we need some kind of transition, we do need to have something more than the World Trade Organization rules' – every time you hear something like that – the world bets on Britain.

"We're well placed to make a great success of this century. We've got a very competitive economy, we've got really successful entrepreneurial businesses, and we've got a great workforce.

"Let's make sure we have close trading relationships with our key neighbours outside the EU – we're leaving the EU – but that doesn't mean we are leaving the trading arrangements that have sustained this country for centuries."

Osborne said it was good to arrange trade agreements with countries such as Australia and the US, but our starting point and priorities should be on our existing partners such as France and Germany.

Osborne added: "You can't say that, 'We're a beacon of free trade in the world,' and the main thing you achieve is an act of protectionism – the biggest in British history.

"I'm a massive fan of trade deals with Australia, I want to do trade deals with China… but there's no point saying you want all of that trade, but you don't want to do the trade we already do with countries we already do with countries like Germany and France, which are of course central trading partners to ours."