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‘We’ve got to move on’: Rachel Reeves rejects calls to negotiate UK-EU customs union

by Justin Marsh
January 25, 2025
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Ministers have rejected calls for the UK to move significantly closer to the EU in order to boost economic growth, insisting that Brexit has brought “opportunities” and some benefits for the British economy.

Speaking to Bloomberg at the World Economic Forum in Davos, chancellor Rachel Reeves and business and trade secretary Jonathan Reynolds both suggested it would be a mistake for the UK to negotiate a customs union arrangement with the European Union.

It was put to the ministers that most effective thing that the government could do to increase GDP growth “is to do a fresh deal with Europe — something like a customs union.”

In response, Reynolds insisted that there is a “high degree of ambition” in government with regard to establishing a “reset” of the UK-EU relationship. But he argued that the UK had been harmed by the “political uncertainty” of Brexit and said Labour would not look to “refight those arguments”.

The trade secretary said: “I do think people sometimes fail to recognise that the evident problems of the challenges of leaving the European Union for the UK were obviously about a significant change in our terms of trade, but the political uncertainty that came with that was also a real problem.” 

***Politics.co.uk is the UK’s leading digital-only political website. Subscribe to our daily newsletter for all the latest news and analysis.***

He added: “So [it is] our decision to not relive, not to refight those arguments, but to focus on improving that relationship [with] practical things — as well as build those relationships with the Gulf, with India, maybe the US. Look at how we’ve been an outlier in terms of our lack of engagement with China. How can we turn some of that around? Difficult, but important to do.

“I think you’ve got to recognise if you’re, as we have done, leaving something like the single market, there’s a cost there. You have to mitigate that. But I think a conversation just about Europe, honestly, it’s not enough in its own right to give the UK the platform it needs.”

The chancellor said: “[The business secretary] and I both voted to remain in the European Union, but we’re outside the European Union. We’ll have been for nine years this summer. We’ve got to move on. There are opportunities outside the European Union, opportunities, for example, like AI, where we have a very different regulatory approach to AI compared to the European Union’s approach. 

“That makes Britain a more attractive place for AI and tech companies to invest than in other European countries. We should take advantage of that. We should shout about it, and we should get that investment in.

 “Just in the six months that we’ve been in office, £40 billion of private investment into AI and tech into the UK. That’s really exciting. I think some of that has come to the UK, because you look at the UK compared to other jurisdictions, and we are a better place to invest.”

Reeves added: “We do want a reset of our relations. We don’t want the antagonism and the battles that the previous government seemed to quite relish. It’s why also I went to Beijing and Shanghai last weekend to reengage there — the first economic and financial dialogue between our two countries for nearly six years.”

In a speech last week, Liberal Democrat leader Ed Davey called on the government to negotiate a new customs union with the European Union to “turbocharge our economy in the medium and long term.”

Davey criticised the government for ruling out a customs union arrangement with the EU, arguing such a deal would allow the UK to handle “president Trump from a position of strength, not weakness.”

Josh Self is Editor of Politics.co.uk, follow him on Bluesky here.

Politics.co.uk is the UK’s leading digital-only political website. Subscribe to our daily newsletter for all the latest news and analysis.

Negotiate UK-EU customs union to tear down ‘damaging’ Brexit barriers, Davey urges Starmer

The post ‘We’ve got to move on’: Rachel Reeves rejects calls to negotiate UK-EU customs union appeared first on Politics.co.uk.



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