Ten years after the referendum, the UK's economic relationship
with the European Union remains decisive - accounting for 41% of
UK exports and 50% of UK imports in 2024 - yet the
Government's ‘reset' risks falling short of its ambitions for
growth. Progress is slow, leaving businesses facing both new
frictions and new frustrations.
Following the Committee's call last year for an
ambitious agenda that delivers for business, growth and
economic security, the UK and EU agreed a Security and Defence
Partnership and set out a “Common Understanding” on closer
cooperation. But delivery since then has been limited - and key
questions about the Government's objectives, trade-offs and
negotiating strategy remain unanswered.
Ministers are preparing new legislation that could grant sweeping
powers to pursue dynamic alignment with EU rules - without
clarity on how those powers will be used, or what Parliament will
be asked to approve.
The UK has long acted as a bridge between the United States and
Europe. But that position is under strain in a more fragmented
global economy, with rising protectionism, geopolitical rivalry,
and growing pressure to choose sides.
Without a clearer strategy and a lot more ambition, firms face
uncertainty over investment decisions, supply chains, and
regulatory divergence - and risk being shut out of both major
markets.
The Business and Trade Committee is today launching a call for evidence as part
of a “stocktake” of the UK's economic relationships that will
review the full scope of deeper alignment options, and evaluate
the trade-offs and constraints with the new free trade agreements
the UK has now signed.
This inquiry will examine:
- Whether the UK has a coherent strategy for its economic
relationship with the EU
- The state of negotiations on the reset — and whether progress
is being delivered
- The trade-offs the Government is making between access to EU
markets and alignment with other partners
- The implications for trade, energy cooperation and economic
security
Rt Hon , Chair of the Committee,
said: “The Government promised a reset with Europe
- but so far it risks failing to deliver the growth the UK
economy needs.
“Businesses are facing new frictions, new frustrations, and no
clear sense of where negotiations are heading. Yet at the same
time, ministers are seeking sweeping powers without setting out
how they will be used. So, we will test whether the Government
has a credible plan to cut barriers and unlock growth — and
whether deeper integration with Europe can work alongside our new
trade deals to accelerate trade in the decade ahead.”
The Committee will report before the summer.
