Britain will not lower its standards or water down regulation in exchange for a trade deal with the US, the chancellor has confirmed.
Rachel Reeves was speaking ahead of a pivotal meeting with her American counterpart in Washington DC.
In an interview with Sky News, Ms Reeves said she was “confident” that a deal would be reached but said she had red lines on food and car standards, adding that changes to online safety were “non-negotiable for the British government”.
The comments mark the firmest commitment to a slew of rules and regulations that have long been a gripe for the Americans.
Image: Rachel Reeves spoke to Sky’s Gurpreet Narwan
The US administration is pushing for the UK to relax rules on agricultural exports, including hormone-treated beef.
While Britain could lower tariffs on some agricultural products that meet regulations, ministers have been clear that it will not lower its standards.
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However, the government has been less firm with its stance on online safety.
A tech red line
The US tech industry has fiercely opposed Britain’s Online Safety Act, which was introduced in 2023 and requires tech companies to shield children from harmful content online.
In an earlier draft UK-US trade deal, the British government was considering a review of the bill in the hope of swerving US tariffs.
However, the chancellor suggested that this was no longer on the table.
“On food standards, we’ve always been really clear that we’re not going to be watering down standards in the UK and similarly, we’ve just passed the Online Safety Act and the safety, particularly of our children, is non-negotiable for the British government,” she said.
She added that Britain was “not going to water down areas of road safety”, a move that could pave the way for American SUVs that have been engineered to protect passengers but not pedestrians.
While non-tariff barriers will remain intact, it was reported on Tuesday night that the UK could lower its automotive tariff from 10% to 2.5%.
What can Britain offer the Americans if it’s not prepared to lower its standards?
Donald Trump has previously described non-tariff barriers that block US exporters as “cheating”.
Britain does have some scope to bring down tariff rates – and Rachel Reeves suggested that this was her focus – but ours is already a highly open economy, we don’t have huge scope to cut tariff rates.
The real prize for the Americans is in the realm of these non-tariff barriers.
There has been much speculation about what the UK could offer up, but the chancellor on Wednesday gave a comprehensive commitment that she would not dilute standards.
There are many who will breathe a collective sigh of relief – from UK farmers to road safety campaigners and parents of young children.
While the government is sensitive to any potential public backlash, it also has another factor to think about.
When Ms Reeves arrives back home, she will begin preparations for a UK-EU summit in London next month.
The UK’s food and road safety standards are, in many areas, in sync with Europe, and Britain is seeking even deeper integration.
Lowering standards for the Americans would make that deeper alignment with the Europeans impossible.
The chancellor has to decide which market is more valuable to Britain.
The answer is Europe.
Back at home, the chancellor suggested that she was still open to relaxing rules on the City of London, even though global financial markets have endured a period of turmoil, triggered by President Trump’s trade war.
Reforms at home?
In her Mansion House speech last November, the chancellor said post-2008 reforms had “gone too far” and set the course for deregulating the City.
Asked if that was a wise move in light of the recent sharp swings in the financial markets, Ms Reeves said: “I want regulators to regulate not just for risk but also for growth.
“We are making reforms and we have set out new remit letters to our financial services regulators.”
Britain’s borrowing costs hit their highest level in almost 30 years after Mr Trump’s Liberation Day tariffs announcements, a stark reminder that policy decisions in the US have the power to raise UK bond yields and in turn, affect the chancellor’s budget, dent her already small fiscal headroom and derail her plans for tax and spend.
However, the chancellor said she would not consider adapting her fiscal rules, which include a promise to cover day-to-day spending with tax receipts, even if it gives her more room to manoeuvre in the face of volatility.
“Fiscal rules are non-negotiable for a simple reason, that Britain must offer under this government fiscal and financial stability, which is so important in a world of global uncertainty,” she said.
For decades he was the dissident backbencher, then unlikely Labour leader. She was a firebrand left-wing Labour MP with a huge online presence. To the left – on paper – it looked like the perfect combination.
Coupled with the support of four other independent MPs, it held the blueprints of a credible party. But ever since the launch of Your Party (working title) the left-wing movement has faced mockery and exasperation over its inability to look organised.
First, we learned Jeremy Corbyn’s team had been unaware of the exact timing of Zarah Sultana’s announcement that she would quit the Labour Party. Then a much bigger row emerged when she launched a membership drive linking people to sign up to the party without the full consent of the team.
It laid bare the holes in the structure of the party and pulled focus away from its core values of trying to be a party to counter Labour and Reform UK, while also drawing out some pretty robust language from their only woman MP calling the grouping a “sexist boys club”. It gave the impression that she was being sidelined by the four other male MPs behind the scenes.
This week, they tried to come together for the first time at a rally I attended in Liverpool and then, in quick succession, another event at The World Transformed conference the day after. But not everyone I spoke to who turned up to see the two heroes of the left found them all that convincing.
Jeremy Corbyn admitted to me that “there were some errors made about announcements and that caused a problem”. He said he was disappointed but that “we’re past that”.
Image: Jeremy Corbyn and Zarah Sultana take part in a discussion on Your Party at The World Transformed conference in Manchester. Pic: PA
Zarah Sultana said they were like Liam and Noel, who managed to “patch things up and have a very successful tour – we are doing the same”.
The problem is, it didn’t really explain what happened, or how they resolved things behind the scenes, and for some, it might have done too much damage already.
Layla signed up as a member when she first saw the link. It was the moment she had been waiting for after becoming frustrated with Labour. But she told me she found the ordeal “very unprofessional, very dishonest and messy”, and said she doesn’t want to be in a disorganised party and has lost trust in where her money will end up. She’s now thinking about the Greens. She said their leader, Zack Polanski “seemed like such a strong politician” with “a lot of charisma”.
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Jeremy Corbyn’s back – with Zarah Sultana and a new party. But is it a real threat to Labour, or just political theatre?
Since Polanski’s rise to power as leader, the Green Party has surged in popularity. According to a recent poll, they went up four points in just one week (following their conference). Voters, particularly on the left, seem to like his brand of “eco populism”.
While he has politely declined formally working in conjunction with Your Party publicly, he has said the “door is always open” to collaboration especially as he sees common goals between the two parties. Zarah Sultana said this weekend though that the Greens don’t describe themselves as socialists and that they support NATO which she has dubbed an “imperialist war machine”.
While newer coalitions may not be the problem for now, internal fissures might come sooner than they expect. Voters at the rally this weekend came with pretty clear concerns about some of the other independent MPs involved in Your Party.
Image: The two heroes of the left fell out over a row over their party’s paid membership system
I asked Ayoub Khan if he considered himself left-wing. A question that would solicit a simple answer in a crowd like this. But he said his view was very simple, that he is interested in fighting for equality, fairness and justice: ‘We all know that different wards, different constituencies have different priorities and MPs should be allowed to represent the views of the communities they serve.” To him, that can sometimes mean voting against the private school tax and against decriminalising abortion.
The Your Party rally on Thursday night was packed, but the tone was subdued. People came full of optimism but they also wanted to make up their mind about the credibility of the new offering and to see the renewed reconciliation up close.
The organisers closed the evening off with John Lennon’s song, Imagine. That was apt, because until the party can get their act together, that’s all they’ll be doing.