The UK government's proposal to create a single market for goods with the EU has been rebuffed by Brussels, according to sources. The idea, presented by Cabinet Office official Michael Ellam during recent visits, aimed to deepen trade ties but was rejected in favour of a customs union or EEA membership.
EU officials suggested alternatives that are incompatible with Labour's red lines, which rule out rejoining the single market, customs union, or accepting free movement of people. UK sources denied a definitive rejection, stating it remains one of several options under discussion ahead of a summit tentatively set for 13 July.
Both sides hope to announce a veterinary agreement, an emissions trading scheme link, and a youth mobility programme at the summit. However, Labour's efforts face similar obstacles to Theresa May's Chequers plan, as EU officials fear a special UK deal could embolden Eurosceptic populists in member states.
An EU diplomat warned that treating a non-member better than members could trigger internal debates on EU cooperation. UK government sources noted that Brussels has opened talks on food and agricultural access, as well as electricity, while a Cabinet Office spokesperson confirmed negotiations for an ambitious package including a food and drink SPS deal and an ETS deal, expected to add £9bn annually to the UK economy by 2040.
