Rachel Reeves plans to end the UK’s “fractious” post-Brexit accord with the EU, a relationship she said had been defined by “division and chaos”, by promising closer ties in the first speech by a UK chancellor to eurozone finance ministers since 2020.
Reeves will say she wants to adopt a “business-like” approach through an “economic reset” with the EU, offering the goal of driving up trade and growth.
“This is the first time a British chancellor has addressed the Eurogroup [of finance ministers] since Brexit,” Reeves will tell the meeting in Brussels. “It is a signal of the new UK government’s commitment to resetting our country’s relationship with the European Union, and the importance I place in realising the economic potential of our shared future.
“I know that the last few years have been fractious. Division and chaos defined the last government’s approach to Europe. It will not define ours,” she will say.
Some Brussels officials have taken a tough line on any revisions to cross-border trading relations while the UK refuses to consider rejoining the single market and customs union and rules out the free movement of labour.
There are concerns in No 11 that any closer ties Reeves orchestrates could be undermined by demands from Brussels for greater access to UK fishing waters as the price for any relaxation of border checks. An extension of EU fishing rights remains a major policy aim in many European capitals, including Madrid.
Emphasising the tensions inside the Eurogroup, Ireland, which holds the chair, is known to want closer relations between Brussels and London as a way to prioritise policies that promote growth.
Political turmoil in Paris and Berlin has potentially given the UK further leverage as a source of improved trade after the two largest economies in the 20-member eurozone suffered a slump in business confidence.
Reeves will say the strategic strengthening of relations through her “reset” will be underpinned by an aim of making working people better off through increased investment, lower prices and better jobs.
The chancellor will also highlight three key “shared challenges” that improved UK-EU relations could tackle – the war in Ukraine, championing free trade to drive economic competitiveness and rejuvenating bilateral economic partnerships.
“We want a relationship built on trust, mutual respect and pragmatism,” she will say. “A mature, business-like relationship where we can put behind us the low ambitions of the past and move forward, focused instead on all that we have in common. And all that we might achieve together to keep our countries safe, secure and prosperous.”
The shadow secretary of state for business and trade, Andrew Griffith, said Reeves should ignore the slow-growing EU and “jump on a plane to the US and talk to Trump about getting a US-UK trade deal done”.
Griffiths said the chancellor could quickly revive growth in the UK by reversing tax increases on the business sector that were “devastating” and “crashed confidence”.
The European parliament’s lead MEP on the UK, Sandro Gozi, said in October that Labour had shown a change in attitude, but Keir Starmer’s government needed to spell out what it wanted from its so-ca-called reset of relations with the EU.
On strengthening economic ties, Reeves will say she wants to break down barriers to trade to create opportunities to invest and help businesses to sell in each other’s markets.
“That is why I am here today, that’s what our reset seeks to achieve,” she will say. “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.”
Reeves, who has reiterated the importance of continued “unwavering” support for Ukraine, will also attend a series of bilateral meetings with her counterparts in Europe while in Brussels as a step towards striking more international economic partnerships.
She has said, however, that there would be no unwinding of Brexit with a return to the single market, the customs union or changes to freedom of movement policies.
The home secretary, Yvette Cooper, has said she is still vehemently opposed to an agreement that would allow young people to move more freely between Europe and the UK, a measure that EU diplomats regard as key to unlocking more serious talks in the spring.
Starmer met the president of the European Commission, Usula von der Leyen, in October to put relations on a more stable footing and pave the way for an EU-UK summit next year.
The summit would be between Starmer and the heads of the main EU institutions, Von der Leyen and the incoming European Council president, António Costa.
The UK and the EU share the world’s second largest trading relationship, facilitating over £660bn in trade each year.
“If our economy is to grow then we must export more,” said Shevaun Haviland, the director general of the British Chambers of Commerce. “That’s why we urgently need a better trading relationship with our closest and biggest market.
“Right now, UK firms wanting to trade with Europe are struggling under huge regulatory and paperwork burdens. It’s vital that talks move at pace in the coming months to make life easier for businesses to thrive.”
Reeves is expected to make her next international visit to Beijing in the new year.
