Chancellor Rachel Reeves has hinted at a ‘Brexit reset’ that will focus on deepening relations with the EU, amid reports Britain might join a pan-European customs deal.
In her economic speech to the nation on Wednesday morning, Reeves said she was keen to improve relationships with the bloc in a bid to bring down trade barriers and the red tape faced by traders since Brexit.
Reducing costs for exporters would be part of the government’s efforts to deliver all policies “consistent with the manifesto that contributes to growth and prosperity”, she said.
Labour’s campaign pledges promised to land a veterinary deal with the EU to significantly reduce trading costs for animal and plant goods – although that has yet to materialise.
And last week, Downing Street did not rebut suggestions by EU trade commissioner Maros Sefcovic that the UK could join a customs zone called the Pan Euro Mediterranean Convention (PEM), where countries can source tariff-free raw materials for manufacturing products to be sold within each other’s markets.
Reeves said Labour was being “pragmatic” about its relationship with the EU while still being “ambitious in our goal” – unlike the previous government’s stance to “not engage with the EU” at all.
Her comments come amid pleas from the food and farming industry for government to devise a trade strategy that focuses on boosting UK exports while reducing trade friction with the EU, Britain’s closest trading partner.
Read more: Calls for EU closeness as government gears up for new trade strategy
The Chancellor also reiterated the government would build on the “UK’s special relationship with the US” under President Donald Trump, and that she was looking forward to working with the new Treasury secretary to deepen their economic relationship “in the months and years ahead”.
She added Prime Minister Keir Starmer had discussed the importance of an economy of growth with the new American president last weekend.
The UK stands to gain through positioning itself as an ally to the US amid Trump’s tariff-heavy trade policy approach, which will see the US slap levies on goods from several countries around the world, including neighbours Mexico and Canada as well as China.
Trump has also suggested introducing tariffs on some EU goods.
Unlike the US, though, Reeves repeated her intentions to continue to invest in the net zero mission.
“There is no trade-off between economic growth and net zero. Quite the opposite. Net zero is the industrial opportunity of the 21st century and Britain must lead the way,” she said, announcing more marine areas for offshore wind farms.
The food supply chain has welcomed the Chancellor’s plans for growth.
Read more: Food businesses shouldn’t expect growth in 2025 amid Trump tariffs and inflation, IGD says
“I welcome the confirmation that the government intends to reset the relationship with the EU,” said Cold Chain Federation CEO Phil Pluck. “In doing so, it must work closely with the cold chain to fully understand the impact on food and medicine supply and on food inflation.
“The EU is our most important trading partner and to find common ground on food and pharma safety, import/export standards and inspection guidelines is vital.”
Pluck added: “We welcome the announcement of progress on the proposed Lower Thames Crossing and that planning reforms may well accelerate its development. This is a vital development that will aid food and pharma transport across the whole country network.
“Most of today’s announcements are welcome. But now is the time to turn them into actions.”
No comments yet