A Treasury minister last night claimed Britain rejoining the EU is 'an inevitability' as Labour continued its push for closer ties with Brussels.

Spencer Livermore, a former aide to ex-prime minister Gordon Brown, insisted it was 'absolutely in our national economic interest' to return to the bloc.

The Labour peer offered his 'personal view' as he was challenged in the House of Lords about ministers 'using many of the Brexit dividends that were given to them'.

Craig Mackinlay, the former Conservative MP who now sits in the Lords, highlighted how the Government is enjoying the freedoms afforded by quitting the EU.

He told Lord Livermore: 'It must be noted the Government are enjoying and using many of the Brexit dividends that were given to them'.

Lord Mackinlay of Richborough said this included 'zero tariffs on anything they please' and the 'potential nationalisation of steel'.

Labour recently launched a consultation on suspending tariffs affecting a selection of supermarket items - including fruits, fruit juices, pasta, couscous, and tuna - in response to the economic impact of the Iran crisis.

Meanwhile, the Steel Industry (Nationalisation) Bill - included in last month's King's Speech - is making its way through Parliament.

Lord Mackinlay said, due to Brexit, that the Government 'is able to do whatever it wishes in whichever field it wishes to promote economic growth'.

He also voiced his concern that Keir Starmer's proposed Brexit 'reset' will return the UK to the 'same restrictions' of membership of the EU's single market or customs union.

But Lord Livermore, a member of Chancellor Rachel Reeves' team in the Treasury, replied: 'It really does take a Brexit zealot to say that.'

He added: 'Cutting tariffs may gain us 0.001 per cent of GDP whereas Brexit itself has cost us a minimum of 4 per cent of GDP, although estimates now say that it ranges from 6 per cent to 8 per cent.

'We are seeking to mitigate at the margins the huge damage done to the UK economy by Brexit, so the idea that this is some kind of Brexit benefit is absurd.

'Should we in due course re-enter the EU? My personal view is that that is an inevitability: of course the UK will at one point re-enter the EU because that is absolutely in our national economic interest.

'In the meantime we are doing the European reset, and that is incredibly important in helping growth in our economy.'

Lord Livermore's comments will heighten fears among Brexiteers about the Prime Minister's attempts to forge closer ties with Brussels.

Sir Keir has repeatedly criticised the 'botched' Brexit deal that Labour inherited from the Tories and vowed to improve the UK's trading terms with the EU.

He is hoping to finalise a new food exports deal with Brussels at a UK-EU summit, scheduled for next month, as well as a youth mobility scheme.

But the PM has ruled out a return to the EU's single market or customs union, despite pressure from some Labour MPs.

Wes Streeting, who quit as health secretary last month after losing faith in Sir Keir's leadership, has said he wants to see the UK ultimately return to the EU.

He is expected to join any leadership contest to replace Sir Keir, if one is triggered in the coming weeks.