Closer UK-EU ties key to economic growth, says chancellor
Chancellor Rachel Reeves will call for stronger economic ties between the UK and the European Union (EU) during her landmark address to the Eurogroup finance ministers on Monday. In the first speech by a British chancellor to the Eurogroup since Brexit, Reeves will emphasise that resetting relations can help “break down barriers to trade” and enable “businesses to sell in each other’s markets.”
While the Labour Party has ruled out rejoining the EU or its single market, it remains committed to “deepening ties” with the bloc.
Export struggles and business concerns
The British Chambers of Commerce (BCC), representing 50,000 businesses, has voiced concerns over the challenges UK firms face post-Brexit. “In order for the economy to grow, we must export more,” said the BCC, adding that businesses are grappling with “huge regulatory and paperwork burdens” when trading with the EU.
The Conservative government’s Brexit deal has also faced criticism. Liberal Democrat Treasury spokesperson Daisy Cooper described it as a “disaster for the economy,” citing significant impacts on small businesses, farmers, and fishers caught in “endless red tape.”
Last month, Andrew Bailey, the governor of the Bank of England, made a rare intervention, urging the UK to “rebuild relations” with the EU. While Bailey has typically refrained from commenting on Brexit due to the Bank’s independence.
Brexit has notably affected the export of goods, including food and farming products, which face increased trade barriers. But services, including banking, have performed better than expected.
Labour has reiterated its commitment to honouring post-Brexit agreements established by previous Conservative governments while seeking ways to improve trade relations.
Reeves’ address in Brussels is expected to set the tone for Labour’s vision of rekindling economic collaboration with Europe while respecting the UK’s post-Brexit status.
