There was nothing seriously unexpected in Rachel Reeves’s speech today to EU finance ministers. Most of it was non-committal flim-flam: ‘I believe that a closer economic relationship between the UK and the EU is not a zero-sum game. It’s about improving both our growth prospects.’ Making reference to ‘breaking down barriers’ and relationships ‘built on trust, mutual respect and pragmatism’ isn’t going to excite anyone.
One suspects Reeves’s niceties are more for home than European consumption: a dig at the Tories, and a repetition of the pre-election party line that Labour wants a grown-up rather than argumentative relation with Brussels. Nevertheless there are lurking dangers.
The government is not interested in doing anything to stop the flow of power back to Brussels
For one thing we must be cautious about being too conciliatory towards Brussels at this stage. There are markers that need to be put down but haven’t been. Plans, for example, for the approximation of animal and plant safety provisions have already been floated by Labour in the name of easing trade: innocent sounding at first sight, these could reintroduce by the back door a great deal of the EU micromanagement of the food and farming industry that Brexit freed us from.
The government’s Product Regulation and Metrology Bill will also allow it to introduce EU law on a whole lot of issues by secondary legislation. This is a power one suspects ministers uncomfortable about Brexit (of whom there are many) intend to exercise enthusiastically. A subliminal suggestion by silence that the UK remains happy with developments like these gives away valuable psychological ground in any future negotiations.
There was another serious EU incursion into intra-UK trade that Reeves said nothing about in her speech. EU product safety regulations, always markedly restrictive, are being seriously ramped up next week. As a result of this and of the Windsor Framework as currently operated, the trade barrier for products between Britain and Ulster is being enormously strengthened. There are already stories of British online retailers refusing to supply to Northern Ireland because of the extra bureaucracy involved, and of businesses in Northern Ireland being unable to source materials in Britain for the same reason.
Labour’s convenient silence on this will please Brussels enormously: it wants nothing more than to drive a wedge between London and Belfast by getting Northern Irish businesses to buy more and more from the Republic and less from the UK to save on hassle. At the very least any politician with a commitment to UK cohesion should have hinted that this might have to be revisited. A possible litmus test might have been that for consumer goods and goods that were not to be re-exported from Northern Ireland to the Republic compliance with either UK or EU standards would be enough.
Not only are there markers that should be put down on specific matters; at this stage there is a strong case for being studiedly and expressly non-committal on world issues. Reeves’s speech comes hard on the heels of a suggestion by Keir Starmer that in any economic spat between the EU and the US this country would not take sides with the US, and of repeated calls for the UK to play a closer part in EU defence co-operation.
To give credence to matters of this sort at this stage would be foolhardy. Donald Trump is an unpredictable man and his likely effect on US foreign relations remains enormously uncertain: we simply do not know what the relative positions of the US and EU will be in, say, mid-2025. For the moment, we need a clear indication that the position of the UK is one of ‘wait and see’, rather than any commitment, however unspecific, to ever closer relations with Brussels. Unfortunately today that is exactly what we didn’t get.
Major agreements or concessions are doubtful in the short term following this meeting. Brussels, one suspects, may not take it too seriously because it already senses weakness and indecision in the Labour government, and cannot rely on any consistent policy coming from it. Furthermore, although they have their own problems, including power vacuums in its leading powerhouses of Germany and France, the European Commission is not likely to be in the mood to agree to measures to relax, for example, border controls or paperwork for the export of goods into the EU.
Europe, to put it bluntly, is economically in trouble itself and has every reason to maintain de facto barriers to UK imports. Nor is there much on this side that Reeves can agree to. The government has ruled out things like a return to the single market; it is unlikely to yield on matters really dear to Brussels’s heart like a readmission of EU vessels to our fishing waters.
In the long term, however, we need to remain on our guard. This meeting remains a worrying indication that the government is not interested in doing anything to stop the quiet flow of power back from Westminster to Brussels. The Conservatives and Reform now have plenty of ammunition with which to attack Labour on precisely this. They now need to use it.
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