Better deal with EU will ease cost of living crisis, Reeves suggests

Rachel Reeves, the shadow chancellor, and Sir Keir Starmer, the Labour leader
Rachel Reeves, the shadow chancellor, and Sir Keir Starmer, the Labour leader - PA/Stefan Rousseau

Labour is right to seek closer ties with the EU because a “better deal” would help ease the cost of living crisis, Rachel Reeves has said.

The shadow chancellor said that a “decline in trade” with the continent since Brexit has hit ordinary Britons in the pocket via higher prices.

Her remarks came as Sir Keir Starmer defended his insistence that Britain won’t diverge from the bloc’s laws if he becomes prime minister.

Asked about Labour’s stance, Ms Reeves told the BBC: “The truth is the deal that Boris Johnson secured three years ago is not good enough.

“We have seen a decline in trade between the UK and our European neighbours which pushes up prices and it’s bad for businesses.

“This is not about any sort of dynamic alignment and we’ve made it really clear that we’re not going back into the single market or the European Union.

“We’re not going to be rule takers and accepting any changes the EU bring in in future.”

Ms Reeves said Labour “can get a better deal” because it is “committed to high standards” on the environment and workers’ rights.

She added: “That will be good for UK consumers who’ve seen prices rise and rise and rise, and it will be good for businesses as it will be easier to trade.”

Sir Keir insists ‘no case for going back into EU’

Sir Keir separately defended his Brexit stance after being forced onto the back foot by Tory accusations that he secretly wants to rejoin the bloc.

“I have repeatedly said there’s no case for going back into the EU and that includes the Single Market and the Customs Union,” the Labour leader insisted.

“Equally we will not be a rule taker. The rules and laws of this country will be made in Parliament according to the national interest.

“But that does not mean that a Labour government wants to lower standards on food, wants to lower standards on people’s rights at work.”

The pair’s decision to rule out dynamic alignment, where Britain would effectively copy and paste EU rules, throws one of their key Brexit pledges into doubt.

Labour has said that it would seek a new veterinary agreement with the bloc that would dramatically reduce import and export checks on food.

Sir Keir has put the policy front and centre of his mission to “tear down unnecessary trade barriers” with the continent and boost exports.

Brussels has repeatedly made clear it will only countenance a Swiss-style deal, which would require the UK to automatically adopt European regulations.

Rachel Reeves
Rachel Reeves has suggested that a better deal with Brussels will help ease the cost of living crisis - Getty Images/Dan Kitwood

David Lammy, the shadow foreign secretary, told The Telegraph that Labour “has been clear on the red lines” it has set down ahead of talks with Brussels.

“I don’t think your readers are surprised that the Labour Party is committed to high standards – the British people are committed to high standards,” he said.

“We want high standards on environmental protection. We want high standards on workers rights. That is not new, we’re not tearing up arrangements for the sake of it.”

Labour’s position on Brexit has come under fierce scrutiny following Sir Keir’s unguarded remarks to a Left-wing Canadian think tank last weekend.

His insistence that “we don’t want to diverge” from Brussels was leapt on by senior Tories, who said it showed he had a secret agenda to rejoin the bloc.

And he faced fresh pressure from within his own party to soften his Brexit stance as Sadiq Khan called for him to prioritise “closer alignment with the EU”.

The Mayor of London told Sky News: “It comes by looking at every single sector in relation to the deal done with the EU, in relation to financial services.

“There should be a closer alignment with the European Union. That would mean, though, negotiating on the deal we currently have.

“You can’t just stick your head in the sand, particularly when there’s a review option in 2025, and pretend things are working well when they clearly aren’t.”

Rees-Mogg: Sir Keir wants to rejoin EU

It is the second time Sir Keir has been beset by Brexit woes in the space of a week, after he also faced a backlash over his migration plans.

He was forced to fight accusations that his strategy to stop the boats would require Britain to take in tens of thousands of asylum seekers a year from the EU.

Conservative strategists claim that the Labour leader’s struggles show he is beginning to make strategic blunders as he is forced to flesh out his policies.

Chris Clarkson, the Tory MP for Heywood and Middleton, said: “Sir Keir’s position on the EU, as with so many other things, entirely depends on who he’s talking to.”

Sir Jacob Rees-Mogg, a former Brexit opportunities minister, added: “Starmer doesn’t want to deviate from Brussels at all, ever. In reality, he just wants to rejoin.”

It comes after Ms Reeves pledged to change the law so that every big tax and spend decision made by Labour is analysed by Britain’s fiscal watchdog.

The shadow chancellor said the policy was to avoid a repeat of the “disastrous mistakes” made by Liz Truss in last year’s infamous mini-budget.

Her plan is for a “fiscal lock” whereby ministers would be legally bound to consult the OBR on permanent tax and spending reforms above a certain threshold.

George Osborne, the former Tory chancellor, backed Labour’s “sensible” proposals, arguing that Rishi Sunak would be “smart” to make the changes himself.