Chancellor Rachel Reeves has declared Brexit has “not been good for Britain” as she said the UK “should absolutely align” with Brussels.
Speaking to The Times ahead of her annual Mais lecture in the City of London next week, the Chancellor said the EU represents the “biggest prize” for boosting Britain’s stagnant economic growth.
She plans to use the speech to argue for closer alignment with the single market, describing the approach as a “big bet”.
The move marks a significant shift in Labour’s stance on Europe as the party positions itself against Reform UK.
Ms Reeves and Sir Keir Starmer are said to believe the country has changed since the 2016 referendum and that voters may now be open to closer ties with Brussels if it improves their daily lives.
“It’s almost ten years since we voted Leave. That ship has sailed but there’s an awful lot we can do to improve our trading relations,” she said.
“Where that requires alignment in our national interest, we should absolutely align.”
The Chancellor claimed she had recently spoken with the chief executive of a major supermarket and the head of a large conglomerate, both of whom told her Brexit had caused considerable harm.
The Chancellor said the EU represents the ‘biggest prize’ for boosting Britain’s stagnant economic growth
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“These are two huge businesses saying it’s difficult for us and it pushes up prices and costs, but for small businesses it is really challenging,” she said.
Britain will rejoin the Erasmus student exchange programme next year, though Ms Reeves said a “generation of our children” had missed out on the opportunity.
She also set out ambitions for a youth mobility scheme allowing young Europeans to live and work in the UK, and vice versa.
Asked whether numbers would be capped, she described the issue as a “live negotiation” but insisted it would not mean a “return to free movement”.
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Britain will rejoin the Erasmus student exchange programme next year
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Given a choice between President Donald Trump and European Commission President Ursula von der Leyen, Ms Reeves declared her backing for the latter.
She added: “I believe our future is closely intertwined with that of Europe.”
The Chancellor’s Her Mais lecture is expected outline two additional growth strategies focused on artificial intelligence and regional development.
A new development corporation will be created to accelerate construction in Oxford as part of the Oxcam corridor linking the city to Cambridge.
Ms Reeves said she would choose Ursula von der Leyen over Donald Trump
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Funding for land purchases will also be doubled.
“If we want to unlock the full potential and make that Oxcam corridor the Silicon Valley of the whole of Europe, the Government has got to partner with business to unlock that,” she said.
However, the Chancellor’s growth agenda has been overshadowed by the economic fallout from US military action in Iran.
Just over two weeks ago, Ms Reeves said she was visiting a building society in her constituency when she received an urgent summons.
“I got a message that I needed to attend an urgent NSC meeting,” she told the newspaper.
“There wasn’t time to get back to London so I went to a secure location not far from where I was and had to dial in from there. And that’s when it really kicked off.”
The meeting addressed Britain’s response to the looming military action and its likely impact on household costs.