The biggest prize for Britain’s growth comes through deeper integration with the EU, Chancellor Rachel Reeves has said this evening.
Setting out the government’s case for closer economic and security ties with its nearest neighbours at an event at the London School of Economics, the Chancellor said: “The biggest prize is clearly with the EU.
“The truth is economic gravity is reality. Almost half of our trade is with the European Union. We trade almost as much with the EU as the whole of the rest of the world combined.
“There are three big trading blocs in the world – there's the US, there's China, and there is Europe. We want to make Europe as strong as possible, and that means not putting up the drawbridge.”
With global trade facing increasing fragmentation, Reeves made clear that Britain would resist the turn towards protectionism and instead seek to bring down barriers to trade with trusted partners. This includes the EU, with the Chancellor confirming that Britain will align with EU regulatory standards where it is in its national interest, removing barriers to trade and giving businesses the confidence to invest.
The resetting of relationships with the EU is a central pillar of the Chancellor’s securonomics approach to build resilience through stability, investment and reform at home while tearing down barriers to trade abroad. While Britain is pursuing stronger trade relationships across the globe – with India, through CPTPP, and with the United States - proximity matters in trade, and in security.
The Chancellor therefore also made the strategic case for closer cooperation with Europe on defence, arguing that Britain’s security is bound to that of its neighbours. Chancellor Rachel Reeves said: "I strongly believe that Britain's future is inextricably bound with that of Europe's – for economic reasons, but also reasons of security, resilience and defence.
“On defence, we don't want to create more barriers. We want to be bringing those barriers down. We want to greater integrate supply chains, not damage them by taking a sort of inward-looking approach.
“But I don't think any Chancellor actually believes we are getting the value for money that we should. Things like interoperability, joint procurement, not every country in Europe having different specifications when they're buying equipment – the potential there is huge.”
The Chancellor was speaking at an event on security in Europe held by Brussels-based economic think tank Bruegel to mark its 20th anniversary.
