Rachel Reeves says closer UK and EU ties will boost economic growth
Getty ImagesChancellor of the Exchequer Rachel Reeves told financial leaders in Brussels that closer ties between Britain and the European Union (EU) would boost economic growth.
In the Prime Minister’s first address to the Eurogroup since Brexit, Reeves said a “reset” in the relationship would mean “breaking down trade barriers” and helping “businesses sell in each other’s markets”.
While Labor has ruled out rejoining the trading bloc, it has repeatedly said it wants the UK to “deepen its ties with the EU”.
The Conservatives accused Labor of “following EU rules without asking for anything in return”.
Reeves said after a meeting with the finance minister that she wanted a “more commercial relationship” between Britain and the EU, but declined to say which parts of Britain’s relationship with the bloc she wanted to change.
“Today is not about starting negotiations… today is about rebuilding relations,” she said, adding that negotiations would begin “in the new year.”
The EU says it wants to see a plan for young Europeans to live and work in the UK and UK – Prime Minister Sir Keir Starmer has ruled this out in the past.
Meanwhile, the UK has previously said it is seeking a veterinary deal that could mean meat, fish, dairy and live animals face fewer checks as they cross the UK-EU border.
Closer alignment with European food standards could also complicate any attempts by Britain to forge closer ties with the United States after Donald Trump returns to the White House in January.
The British Chambers of Commerce (BCC), which represents about 50,000 businesses, said “we must increase exports” for the economy to grow, but British businesses “struggling under a huge regulatory and paperwork burden”.
Shadow business secretary Andrew Griffiths urged her to ‘jump on a plane’ ahead of chancellor’s speech Go to the US and talk to (President-elect) Trump about getting a US-UK trade deal, rather than trying to slide the UK back into a slow-growing EU. “
But the Liberal Democrats Treasury spokesperson Daisy Cooper said: “The Conservatives’ botched Brexit deal is a disaster for the economy, leaving small businesses, farmers and fishermen mired in endless red tape.”
“It is in our national interest to establish more normal trade relations with our nearest neighbors and trading partners,” German Finance Minister Jörg Kukis said in Brussels.
Spanish Finance Minister Carlos Culpo said: “The further development of the relationship is a win-win situation and we need to participate.”
Dutch Finance Minister Erko Henin described Britain as an important trading partner but added: “I will not renegotiate Brexit.”
Last month, Bank of England Governor Andrew Bailey said: UK must ‘rebuild relationship’ with EU.
The governor has avoided commenting on Brexit due to the central bank’s independence from Westminster politics.
“The impact on trade appears to be more on the goods side than services,” Mr Bailey said.
“But it underlines why we must be alert to and welcome opportunities to rebuild our relationship while respecting this very important decision by the British people.”
Exports of goods such as food and agricultural products are affected by new trade barriers. But services, including banking, performed better than expected.
Labor says it is committed to implementing the post-Brexit deal struck by the previous Conservative government.
These include the Windsor Framework covering trade between the UK and Northern Ireland.
But Reeves told finance ministers in Brussels: “The reset of the relationship is in the best interests of our shared economy and the countries that rely on it.
“This means breaking down trade barriers, creating investment opportunities and helping our businesses sell in each other’s markets.”
Reeves’ speech comes at a critical time for the British and European economies, after President-elect Donald Trump threatened to impose tariffs of up to 20% on all goods imported into the United States.
Carsten Brzeski, global head of financial services firm ING Research, told the BBC’s Today program that European leaders were “obviously” interested in working more closely with the British government as a result of Trump’s election.
He said potential tariff changes could pose a “threat” to European economies such as Germany that export large amounts of goods to the United States.
“This is also linked to Donald Trump’s idea of tax cuts and deregulation in the US. This could also make the US economy more attractive than the EU economy and could eat into Europe’s growth potential to a certain extent,” Brzes Key said.
