Labour would try to improve UK’s post-Brexit trade deal with EU, says Reeves

  • 6/17/2024
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Labour would try to improve elements of the UK’s trade deal with the EU, Rachel Reeves has indicated, saying also that most financial services companies have “not regarded Brexit as being a great opportunity for their businesses”. While Labour remains committed to not making any major changes to Brexit, the shadow chancellor’s comments show that the party could nonetheless make more policy moves on EU trade links than previously believed. In an interview with the Financial Times, Reeves said that as part of wider moves to “reset” Britain’s global image, a Labour government would take a less adversarial approach to dealings with the EU, with less insistence on regulatory divergence. Areas where it could see closer alignment with EU rules could include the chemicals sector and a revised deal for workers in the City of London, Reeves told the paper. “I don’t think anyone voted leave because they were not happy that chemicals regulations were the same across Europe,” Reeves said. “When my constituency voted leave it was purely because of immigration.” She told the FT that the party could introduced a “bespoke” arrangement for the chemicals industry, to try to avoid costs connected to having to register products with a UK system. David Frost, the lead Brexit negotiator under Boris Johnson’s government, who is now a Tory peer, rejected this argument, writing on X: “Except for free movement, people didn’t vote against any single subset of single market rules – they voted against having the rules set in Brussels.” The EU, which has long criticised British attempts to “cherrypick” the benefits of EU membership, is likely to respond extremely cautiously to any plans perceived to give special treatment to a country outside the bloc. After the announcement of a general election, diplomats said a closer relationship was possible, but only if the UK abides by “responsibilities and rules”. A European Commission spokesperson declined to comment on the specific ideas outlined by the person likely to become the UK’s next chancellor. “We’re not going to be commenting on every comment that is made in the context of the UK electoral campaign,” said Eric Mamer. “We have discussion fora with [the UK] to manage the relationship and it is in that context that we discuss any issue that can come up.” Reeves also said Labour could amend areas such as the mutual recognition of professional qualifications, saying this could benefit financial services. “The majority of people in the City have not regarded Brexit as being a great opportunity for their businesses,” she said. Services and financial services were “pretty much excluded” from the Brexit deal, she said. While Reeves’s proposals are modest, they represent something of a shift in tone for the party, which has thus far in the election campaign preferred to not talk about Brexit. In a seven-way TV debate last week, Angela Rayner, the party’s deputy leader, joined Nigel Farage and the Conservatives’ Penny Mordaunt in saying she would “never” seek to rejoin the EU. In the interview, Reeves reiterated that a Labour government would never rejoin the single market or customs union, and would not even back a scheme for youth freedom of movement. The ability to amend any elements of the deal within such narrow parameters will be necessarily limited, and dependent on the EU wanting to do so. Also in the interview, Reeves said a Labour government would not always be entirely cautious on the economy and was willing to “upset some people” to boost growth, rather than “having a fight about different taxes”. The bulk of the Conservative campaign so far has been based on trying to warn about what the party says would be tax rises under a Labour government, a narrative that Labour rejects. The Tory warnings have been echoed by friendly newspapers, with several front pages on Monday warning of supposed rises to a series of taxes under Labour. Reeves told the FT that her party could go ahead with its plans without even tax rises on the wealthy, saying: “We’re not seeking a mandate to increase people’s taxes. We’re seeking a mandate to grow the economy.”

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