Labour will face difficulties in securing major changes to Boris Johnson’s Brexit deal because the European Union (EU) has “moved on” from Brexit, a new report suggests.
New analysis from UK in a Changing Europe (UKICE) suggests that the EU is “evolving… in a direction which is likely to make deeper cooperation with the UK harder”.
The report highlighted that the EU has changed significantly since the UK’s departure and is increasingly concerned with strategic autonomy, meaning it is actively trying to reduce its reliance on foreign partners.
“This makes it a more challenging partner for the UK to work with,” the report highlighted.
Labour has pledged to “deepen ties” with the EU if elected, with Shadow Chancellor Rachel Reeves suggesting the party will seek closer ties on specific areas such as chemicals and financial services.
“The majority of people in the City have not regarded Brexit as being a great opportunity for their businesses,” Reeves told the Financial Times.
But the report highlighted the challenges a Labour administration would likely face, suggesting the government would need to offer clear incentives, such as a mobility agreement, because “UK relations are not a priority for the EU”.
A Labour government would likely have to accept “the long negotiation and alignment with relevant EU legislation which such agreements would entail,” the report said.
Anand Menon, director of UKICE, said: “The UK’s relations with the EU are likely to be a key priority for a new government given not only the need to boost economic performance but also a rapidly shifting geopolitical landscape. It is far from clear, however, whether significant changes in the relationship will be possible.”
UKICE also drew attention to how attitudes have changed to regulatory divergence. The government is increasingly seeking not only to minimise the disruption of regulatory divergence, but looking at where greater alignment is possible.
Managing regulatory divergence is particularly important due to ‘passive’ divergence. The EU is regulating in many areas where the UK is not or is further behind, meaning divergence will continue to grow.
“A central policy challenge for the next government will be managing the multiple risks stemming from passive divergence,” the report added.