Chancellor Rachel Reeves has declared that Labour can win the political argument for a closer relationship with the European Union, describing stronger alignment as the “biggest prize” for UK economic growth. Speaking at a London event on European security organised by the Bruegel thinktank, she acknowledged that some Labour strategists have been wary of pushing for closer ties for fear of alienating pro-Brexit voters, but insisted the case was winnable.
Reeves pointed to the recent agreement to rejoin the Erasmus student exchange scheme as a popular step, and stressed the overriding importance of EU trade due to geographical proximity. “Economic gravity is reality, and almost half of our trade is the EU,” she said. While open to deals with India, the US and South Korea, she argued none would match the benefits of better trade relations with Europe.
The chancellor indicated she would be willing to agree to further alignment with EU rules and standards at a sectoral level, including a possible Swiss-style agreement. “Further integration will require further alignment, but I’m up for that,” she said. She noted that areas already under discussion—such as a food and farming deal, a youth mobility scheme, and participation in the EU’s carbon border adjustment mechanism—were just “first base”.
Reeves reiterated Labour’s rejection of a customs union or single market re-entry, which were ruled out in the party’s election manifesto. However, she stressed the importance of working closely with the EU on security, resilience and defence procurement, warning that “Russia is not going to sit on the sidelines”.
Shadow Chancellor Sir Mel Stride accused Labour of wanting to “row back on Brexit since day one” and of blaming Brexit for its own economic failures. Reeves’s remarks came ahead of the release of official growth data, and she expressed optimism about recent signs of productivity growth and falling interest rates.
