Rachel Reeves sets out plan for UK to align with more rules set in Brussels
The UK should follow more of the European Union’s rules to boost trade and cut prices, Rachel Reeves has claimed.
The Chancellor warned the UK risked being “stranded” between rival trading blocs unless it sought a closer relationship with Brussels. She said the UK would still diverge from the EU’s regulations in some areas but they would be “the exception, not the norm”. The Chancellor, delivering the annual Mais Lecture at the Bayes Business School in London, put greater economic co-operation with Europe at the centre of her plan to kickstart the UK’s weak growth. “The prize is considerable,” Ms Reeves said, claiming closer alignment would help bring down prices and inflation. Brexit had created “profound uncertainty” and left the UK facing the risk of being “stranded between powerful trading blocs as globalisation retreats”, she warned. “Our fate as a country is inescapably bound with that of Europe,” the Chancellor added. Setting out the “deep damage” of Brexit, Ms Reeves said it had hit gross domestic product (GDP) – a measure of the size of the economy – by up to 8% and contributed to higher prices for businesses and consumers. She insisted she was not trying to “turn back the clock” on Brexit but to build a “new and stable future relationship” with Brussels. “Where it is in our national interest to align with EU regulation, we should be prepared to do so, including in further areas of the single market,” the Chancellor said. “A decision to align should be taken where it would mean higher growth and investment, more jobs and consumer benefits, where the future direction of policy is stable and compatible with the UK’s values and objectives and where the UK’s economy and national security and resilience are preserved or enhanced. “When those principles are satisfied, alignment should be forward-looking and durable, providing the certainty that businesses on both sides need to invest and grow. “Now, there are areas in which regulatory autonomy may be necessary for sectors with unique characteristics or strategic importance for the UK, but that should be the exception, not the norm.” Ms Reeves acknowledged she would have to “make and win the political argument”, with Brexit supporters viewing the ability to diverge from Brussels as one of the key benefits of the UK’s exit from the EU. She said: “The truth is this: Britain’s future prosperity will not be built in isolation, but through partnerships with those who share our interests, share our values and share our ambitions. “And no partnership is more important than that between the UK and our European neighbours.” Closer alignment with Brussels “is the right course for our country, a course chosen as a sovereign nation, a course chosen in our national interest”. Ms Reeves also set out plans to increase regional economic growth, including by giving local elected leaders greater spending powers, with proposals to hand them a share of income tax and other national levies to invest in their areas.
Published: by Radio NewsHub