‘Very symbolic and important’ first meeting of chancellor and EU finance ministers since Brexit – Eurogroup president Paschal Donohoe says
Chancellor Rachel Reeves has said she is “overwhelmed” by the response to the UK’s first attendance at an EU finance ministers’ meeting since Brexit.
No negotiations nor demands were made at this point, Ms Reeves said, but they will start in the new year.
UK government red lines on Brexit were reiterated – that there would be no free movement of labour and no return to the single market or customs union – but Ms Reeves said it was in “our collective national interest” to build closer trade relationships with neighbours and to cooperate on security and defence.
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She acknowledged the harm post-Brexit trading has had on the UK, saying the deal was “not the best one for our country and indeed has reduced trade flows, not just from the UK to the European Union, but also from businesses based in the European Union and into the UK”.
There is a “shared objective and a shared challenge” to improve trade and investment flows, she added.
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After “fractious and antagonistic years” now is the time to “rebuild trust” with “allies”, Ms Reeves said.
EU finance ministers want to have “a more businesslike relationship” with the UK, she said, to reset and rebuild.
All assembled ministers agreed growth “is not a zero-sum game” and that all countries in the EU and indeed the UK “need to do more” to boost growth, productivity and competitiveness.
Not since the UK left the EU has a chancellor attended a Eurogroup finance ministers’ meeting.
Meeting all about tone and symbolism while officials worry
Rachel Reeves described today’s meeting as a “milestone” in the effort to reset relations with the EU.
There were no policy announcements, it was the symbolism that mattered.
Ms Reeves is clearly signposting a direction of travel to closer relations with Europe.
She said the government had begun its “reset” with the EU but, when pressed, said that negotiations would begin in January.
Today was about setting the tone.
Ms Reeves repeated the government’s red lines.
The government is likely to press for greater regulatory alignment in key sectors, although the route there is unlikely to be seamless with the EU very reluctant to allow “cherry-picking”.
Here in Britain, officials are worried that any relaxation from Europe will require the UK to offer greater access to UK fishing waters.
There are also concerns among some industries that greater alignment without access to the single market would lead to more onerous rules without fully frictionless trade.
EU reaction
Ms Reeves’s attendance received a “very warm response”, according to Eurogroup president Paschal Donohoe.
Being in the room with 27 EU finance ministers was “very symbolic and important”, he said.
The gathering “set the tone” and laid out areas the UK and EU can continue to cooperate on.
It follows rare public comments on Brexit by Bank of England governor Andrew Bailey at the recent Mansion House and Treasury Committee meetings.
He said the government must be alert to and welcome opportunities to rebuild relations with the EU as Brexit has reduced the level of goods coming into the UK.
“We should be in active dialogue with the EU,” he told MPs at the Treasury Committee.
“I find it hard to understand people who seem to say that we should implement Brexit in the most hostile fashion possible.”
He added: “I take no position on Brexit. I never have. I’ve always said it’s my job to get on and do it and I’ll do it in the best way possible and I think talking, having a relationship with the European Union is the better way to do it.”
Business
Donald Trump tells UK to ‘get rid of windmills’ and says raising windfall tax on North Sea oil is ‘big mistake’
Donald Trump has said the UK is making “a very big mistake” in its fossil fuel policy – and should “get rid of windmills”.
In a post on Friday on his social media platform, Truth Social, Mr Trump shared news from November of a US oil producer pulling out of the North Sea, a major oil-producing region off the Scottish coast.
“The UK is making a very big mistake. Open up the North Sea. Get rid of windmills!”, the US president-elect wrote.
The Texan oil producer Apache said at the time it was withdrawing from the North Sea by 2029 in part due to the increase in windfall tax on fossil fuel producers.
North Sea oil rig. Pic: Reuters
The head of Apache’s parent company APA Corporation said in early November it had concluded the investment required to comply with UK regulations, “coupled with the onerous financial impact of the energy profits levy [windfall tax] makes production of hydrocarbons beyond the year 2029 uneconomic”.
Chief executive John Christmann added that “substantial investment” will be necessary to comply with regulatory requirements.
Mr Trump used a three-word campaign pledge “drill, baby, drill” during his successful election campaign, claiming he will increase oil and gas production during his second administration.
In the October budget announcement, UK Chancellor Rachel Reeves raised the windfall tax levied on profits of energy producers to 38%.
Called the energy price levy, it is a rise from the 25% introduced by Rishi Sunak in 2022 as energy prices soared following Russia’s invasion of Ukraine.
Many oil and gas businesses reported record profits in the wake of the price hike.
The tax was intended to support households struggling with high gas and electricity bills amid a broader cost of living crisis.
Apache is just one of a glut of firms that made decisions to alter their North Sea extraction due to the Labour policy.
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