Chancellor Rachel Reeves warned today that Brexit risks leaving the UK “stranded” between global trading blocs. Consequently, she urged a deeper relationship with the EU.
Speaking at the Mais lecture at Bayes Business School in London, Reeves said closer ties with Brussels should become a priority. She also highlighted AI and regional growth outside London as key objectives.
She insisted diverging from EU rules should remain the exception, not the norm, despite Brexit’s promise of regulatory autonomy. Moreover, she defended her recent tax policies, saying they strengthened the UK economy.
Keir Starmer has promised a “reset” in UK-EU relations. Critics claim this risks undoing Brexit. However, Starmer maintains the UK will not rejoin the customs union or single market.
Reeves emphasised the global economic shift, noting that “globalisation as we once knew it is dead.” She argued Britain now faces new barriers to trade and uncertainty due to Brexit. Furthermore, she said the country risks being left isolated amid powerful trading blocs.
She outlined three strategic priorities for the decade: growth across all regions, AI and innovation, and a deeper relationship with Europe. She said the government’s approach combines stability, investment, and active state intervention.
Reeves acknowledged political challenges. Brexit supporters view divergence from EU regulations as a key benefit of leaving the bloc. Therefore, she stressed regulatory autonomy should be carefully targeted at strategic sectors.
In her speech, Reeves encouraged businesses to collaborate with EU partners. She said when economic gains exceed the costs, closer ties are justified. Additionally, she praised European Commission President Ursula von der Leyen over US President Donald Trump.
Reeves also addressed domestic growth, pointing to investments in Belfast shipbuilding, West Midlands car manufacturing, and steel production in Port Talbot and Scunthorpe. She promised a government steel strategy to secure long-term British production.
Regional leaders will receive a share of some national taxes, including income tax. Reeves confirmed she would outline a roadmap for future fiscal devolution at the next Budget.
Shadow Chancellor Mel Stride criticised Reeves, accusing her of blaming Brexit instead of taking responsibility. He said stalled growth, rising inflation, and declining business confidence reflect her economic mismanagement.
Despite criticism, Reeves maintained that a deeper relationship with Europe offers one of the UK’s strongest opportunities for growth. She concluded that strategic cooperation with EU partners remains essential for the nation’s future.
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