Chancellor Rachel Reeves has insisted Labour can win the political argument for a closer relationship with the European Union, calling it the “biggest prize” for UK economic growth. Speaking at a Bruegel thinktank event on European security, she said economic gravity is reality, noting that almost half of UK trade is with the EU. She added that while the UK is pursuing deals with India, the US, and South Korea, none will match the gains from improved EU trade relations.
Reeves pointed to the recent agreement to rejoin the Erasmus student exchange scheme as one of the most popular moves, and stressed that further integration will require further alignment. Asked about a Swiss-style agreement, she replied: “Further integration will require further alignment, but I’m up for that.” She indicated the UK is keen to explore sectoral alignment, either unilaterally or through negotiation.
The government is due to review the Trade and Cooperation Agreement with the EU by year-end, with a summit on the “reset” in the coming months. Reeves described ongoing discussions—including a food and farming deal, youth mobility, and participation in the EU’s carbon border adjustment mechanism—as “first base”. Both she and Sir Keir Starmer have rejected a customs union or single market return, ruling them out in Labour’s manifesto.
Reeves also emphasised the importance of EU cooperation on security and defence procurement, warning that Russia will not wait. The shadow chancellor, Sir Mel Stride, criticised the approach, saying Labour is desperate to blame Brexit for its own economic failures.
