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Rachel Reeves took the opportunity to stress the relative importance of UK-EU trade in comparison to UK-US trade while in Washington DC. She was there to help negotiate a trade deal with the US which would remove tariffs imposed by President Trump, but instead chose to speak about her ambitions for a closer relationship with the EU. Labour’s strategic priorities are becoming increasingly clear.
Reeves turns her back on trade with the US
Having told Parliament that the Youth Mobility Scheme proposed by the EU was not being considered just a month ago, the government has announced that it is considering a youth mobility scheme with the EU. It is all part of the long-promised ‘reset’ that is starting to take shape. The most concerning aspect of the reset is perhaps the plans for a UK/EU security pact, about which more below.
President Trump met with President Zelenskyy for brief one-on-one talks in St Peter’s Basilica in Rome. Both leaders were there for the funeral of the late Pope Francis. Both sides said that the discussion was constructive. Trump has, in recent days, encouraged Ukrainian and Russian officials to meet to conclude a peace deal designed by the US. Restrictions on the size of the Ukrainian military and the promise of an European peace-keeping force backed by US support remain issues of contention.
An unusual site for a summit
Argentina’s peso has defied economists’ predictions of a sharp crash after a relaxation of its fixed exchange rate. A floating exchange rate is a key part of President Milei’s economic agenda, but critics had warned that relaxing the restrictions on currency trading would see the value of the peso tumble. Instead, the peso was trading at higher than the previous official rate a day after the rules were relaxed.
Media
Brian Montieth on the charity racket taking over British policy-making
Fraser Myers on the government’s green delusions
Blog
Labour’s wretched EU ‘reset’ by Briefings for Britain
Labour’s planned ‘EU reset’ will trade major concessions to the EU in return for at best trivial economic gains and more likely actual net losses including by wrecking prospects of a deal with the US to reduce tariffs. Worse still, it is clearly aimed at laying the foundations for a much broader transfer of economic and political control back to the EU – relegating the UK to a vassal state.
There is a longer-term strategy visible in the government’s Product Regulation and Metrology Bill, which while it may appear innocuous allows ministers to align with EU rules across a wide range of economic sectors. With an expanding CBAM meaning loss of control over tariff policy and alignment with product regulation via this bill, the framework exists for the UK to be put back under EU economic control over time. Importantly, the UK will become a passive rule-taker across most of its economic life accepting EU rules – however damaging – with no say. This is the vassal state position that the UK authorities first tried to create under the premiership of Theresa May.
Key Points
Emerging details about the security pact which the government is negotiating with the EU are extremely concerning. If they are accurate, then Britain stands not only to cede control over key foreign and defence policies but to do so in a way which would be extremely difficult to undo. Keir Starmer seems intent on re-entangling the UK in the legalised bureaucracy of EU decision-making.
The deal reportedly follows the same template as one proposed by the EU in 2018 which was rejected over concerns about sovereignty. That deal would have seen the UK obliged to toe the EU’s line on defence policy with legal sanctions in case of divergence. Alignment would prevent the UK from pursuing closer ties with other anglophone countries whose strategic interests may be more similar to our own than the EU’s.
The new security pact is allegedly to become part of the EU-UK Trade and Cooperation Agreement, which has governed trading relations between the parties since 2021. Under the TCA, there is a legal mechanism which allows either party to claim damages and penalties from the other in case of breach. By incorporating a security pact into the TCA, Keir Starmer exposes future UK governments to effective trade sanctions for pursuing an independent foreign policy. The EU would be able to hold Britain to ransom every time British interests diverged from European ones.
In addition to ceding sovereignty over foreign policy, the new security pact is likely to see Britain participate in EU defence procurement programmes. This would limit the UK’s ability to prioritise domestic weapons suppliers, leaving strategic decisions over key defence supply chains to bureaucrats in Brussels. It seems unlikely that the financial contributions that the UK makes will be worth less than the benefits that we will reap from participating in the scheme. Will EU decision-makers really give much thought to Britain’s interests once they have their hands on British money?
If Brexit was about anything, it was about Britain regaining control over key policy areas. By plotting to sign away Britain’s sovereignty over its own defence and foreign policy, Keir Starmer is defying the settled and declared collective will of the British electorate. He does this at his own peril. Time and again, voters have rewarded politicians that purse independence at the ballot box while punishing those that advocate an ever closer union with Europe.
