The UK Government has agreed to step up co-operation with the EU on a number of core issues – including the removal of costly cross-border checks on food goods – and is now negotiating over the exact details.
The priorities from an economic standpoint are the so-called “SPS” (Sanitary and Phytosanitary) deal, which minimises checks on animal and plant goods across borders, an agreement to trade energy more freely, and joint investment in European-wide defence.
SPS is the most politically contentious area because it will require the British Government to commit to “dynamic alignment”, with the UK automatically adopting many of the same food and agriculture regulations as the EU.
Legislation writing these arrangements into the statute book will be introduced to Parliament in the coming months and is intended to become law before the next King’s speech, expected early next year.
The insider added that British and EU negotiators will also hit points of disagreement over the next few months, saying: “Of course we have different priorities, that is the point of a negotiation – each side fights for its own priorities and hopefully you end up in a place where everyone is happy. I’m optimistic, but there will be fights along the way.”
In her Mansion House speech to the City earlier this month, Reeves emphasised the importance of closer relations with the EU, hailing “a trade deal with the European Union, where our strategic partnership will slash red tape and reduce costs for business as well as providing a platform to further deepen our relationship in future”.
She has promised to make this country’s economy the fastest-growing in the EU, but has been hit with zero growth since taking power a year ago, prompting accusations her tax policies have put businesses off.
However, the Government has decided to keep diverging from the EU on a number of strategic policies, including financial services and the regulation of AI.
Sir Keir Starmer has promised that the UK will not rejoin the EU’s single market or customs union, or accept the free movement of European citizens.
The fights ahead
The “Brexit reset” deal agreed by Sir Keir Starmer and European Commission chief Ursula von der Leyen at a summit in May was hard fought, with the UK forced to give in to the EU’s demands for a long-term fisheries settlement in exchange for an agreement on food and agriculture trade.
But much of the hardest work is still to come, with ministers facing potential difficulties on two fronts.
The British negotiating team, led by Cabinet Office minister Nick Thomas-Symonds, now needs to turn the in-principle agreement into a reality. It is understood to have given up on the idea of striking further deals with the EU for now, in favour of fleshing out the details on what has already been agreed.
While both sides are signed up to progress on all areas, they have starkly different priorities. The UK has food and agriculture, defence and border security at the top of its list; for the EU, a youth mobility deal which would allow under-30s from Britain and the continent to live and work abroad for a set period of time.
Brussels is expected to push for the largest possible cap on numbers in the youth mobility scheme in return for giving the UK what it wants on the other issues.
Meanwhile, ministers will also have to battle with MPs to push legislation enabling “dynamic alignment” of regulations through Parliament, a process they want to complete within a year at the most.
While the large Labour majority in the House of Commons means there is little prospect of the bill being blocked altogether, the Conservatives and Reform UK will use the debates to accuse the Government of seeking to reverse Brexit.
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