The UK government proposed the creation of a single market for goods with the EU as part of an ambitious attempt to reintegrate British trade into Europe, the Guardian can reveal. During recent visits to Brussels, Cabinet Office official Michael Ellam presented the idea, but EU officials reportedly rejected it, instead suggesting a customs union or alignment through the European Economic Area.
Those options are impossible under Prime Minister Keir Starmer’s red lines, which rule out rejoining the EU, the single market, or the customs union. The EEA would also require accepting free movement of people, another Labour red line. UK government sources denied a definitive rejection, saying the proposal was among options being discussed ahead of a summit tentatively scheduled for 13 July.
Labour’s efforts echo Theresa May’s Chequers plan, which sought a common rulebook for goods without free movement of people but was rejected. EU officials worry that a special deal for the UK could embolden Eurosceptic populists in member states. An EU diplomat said that treating a non-member better than a member would trigger an internal debate on the fundamentals of EU cooperation.
Despite the setback, both sides hope to announce a veterinary agreement, an emissions trading scheme link, and a youth mobility programme at the summit. UK sources noted that Brussels has opened talks on access for food and agricultural products, and electricity. A Cabinet Office spokesperson said negotiations are ongoing for deals that could add up to £9bn annually to the UK economy by 2040.
Other areas of potential cooperation include defence, with the UK seeking to join the EU’s €90bn loan for Ukraine, and deals on steel and electric cars to protect British industry from EU rule changes.
