Closer UK and EU ties will boost growth, says Reeves

by Dearbail Jordan

Closer relations between the UK and the European Union (EU) will boost economic growth, Chancellor Rachel Reeves will tell finance leaders on Monday.

In the first address by a British chancellor to the Eurogroup since Brexit, Reeves will say resetting relations means "breaking down barriers to trade" as well as helping "businesses sell in each other’s markets".

While Labour has ruled out re-joining the trade bloc, it has repeatedly said it wants the UK to "deepen ties" with the EU.

The Conservatives said the chancellor should instead be working out how to reverse the "devastating Budget measures that have crashed confidence".

"If [Reeves] is interested in growth, she should tell the prime minister to jump on a plane to the US and talk to [President-elect] Trump about getting a US-UK trade deal done, not trying to take Britain backwards into the slow growth EU," shadow business secretary Andrew Griffith said.

The British Chambers of Commerce (BCC), which represents about 50,000 businesses, said that in order for the economy to grow "we must export more" but UK firms "are struggling under huge regulatory and paperwork burdens".

At the Eurogroup finance ministers meeting in Brussels, Reeves will propose building a "mature, business-like relationship" between Britain and the EU.

"I know that the last few years have been fractious," she will tell her European counterparts. "Division and chaos defined the last government’s approach to Europe. It will not define ours."

She will say: "I believe that a closer economic relationship between the UK and the EU is not a zero-sum game. It’s about improving both our growth prospects."

Liberal Democrat Treasury spokesperson Daisy Cooper said: "The Conservatives’ botched Brexit deal has been a disaster for the economy, with small businesses, farmers and fishers all caught up in endless red tape."

Last month in a highly unusual move, the governor of the Bank of England, Andrew Bailey, said the UK must "rebuild relations" with the EU.

The governor has avoided commenting on Brexit because of the Bank’s independence from Westminster politics.

"The impact on trade seems to be more in goods than services," he said. "But it underlines why we must be alert to and welcome opportunities to rebuild relations while respecting that very important decision of the British people."

The export of goods, such as in food and farming, has been impacted by new trade barriers. But services, including banking, have performed better than expected.

*first published in: Bbc.com