Prime Minister Keir Starmer is seizing a historic chance to reshape the UK's fractured relationship with the European Union, with new legislation set to grant ministers powers to align British trade rules with Brussels. The move, coming nearly a decade after the Brexit referendum, signals a decisive shift from the era of Boris Johnson's settlement, which has been blamed for higher prices, weaker trade, and diminished global influence.
The Legislative Foundation for a New Deal
Reports indicate the government is preparing a bill that would provide the legal groundwork for implementing key agreements with the EU. This follows commitments made at the UK-EU summit in May 2025, where Starmer met European Commission President Ursula von der Leyen at Lancaster House in London. While progress since that summit has been slow, the new law is seen as the first concrete step towards delivering practical fixes.
The initial focus, often called 'phase one' of Labour's reset, is on securing clear deals in four critical areas. A long-discussed Sanitary and Phytosanitary (SPS) agreement on food standards could ease pressure on supermarket prices. An energy trading pact would allow for more efficient cooperation in volatile markets, potentially lowering bills. Beyond economics, restoring a youth mobility scheme and securing UK access to the EU's €150bn defence fund, known as the Safe rearmament fund, are urgent priorities, especially given geopolitical tensions.
Beyond Quick Fixes: The Case for Deeper Alignment
While these initial agreements are vital, Starmer has hinted at ambitions for a more substantial 'phase two'. Dismissing renewed calls for a simple customs union as insufficiently transformative, the Prime Minister appears to be looking at broader economic alignment. Research by Frontier Economics for the group Best for Britain suggests that mutual recognition of professional qualifications and industrial standards, alongside joining the pan-Euro-Mediterranean convention, could boost UK GDP by around 2%.
Critically, this analysis suggests the biggest economic gains would be felt outside London and the southeast, particularly in the Midlands, Yorkshire, and the north-east. This presents a tangible opportunity for the government to deliver on regional growth where previous 'levelling up' promises fell short. All these proposals remain within Labour's stated red lines of not rejoining the single market, customs union, or accepting freedom of movement.
The Inevitable Debate: Cost vs. Benefit
Any closer cooperation will involve a financial contribution and accepting shared rules in agreed areas—a model similar to Switzerland's relationship with the EU. Starmer is likely to welcome this debate. When faced with criticism over cost, proponents can point to the House of Commons Library estimate that Brexit has reduced public finances by roughly £90bn a year. They argue that the price of participation is dwarfed by the cost of isolation, a point underscored by Donald Trump's embrace of tariffs, which leaves Britain more exposed, not more independent.
Some sceptics argue the EU will never agree to such an arrangement with a large neighbouring economy. However, advocates counter that shared economic, security, and geopolitical interests make deeper cooperation not just possible, but an urgent necessity. The new bill on ministerial powers is the first major test of whether the UK and EU can move beyond the Brexit impasse and build a more pragmatic, productive partnership for the future.
