PARLIAMENTARY DEBATE
UK-EU Relations - 22 January 2026 (Commons/Commons Chamber)

The Government agreed a new strategic partnership with the EU in May last year, delivering for UK jobs, easing the burden on bill payers and strengthening our borders. Whereas we are making significant progress, it seems the Conservative party and Reform would rip it up. Given that Reform has just recruited that well-known remainer, the right hon. Member for Newark (Robert Jenrick), who knows what its latest position is.

The inflation figures out yesterday show that despite the Government’s good progress on energy prices, food inflation remains stubbornly high. Even the price of a Tesco meal deal is stuck at £4.25. The Government need to make food and life more affordable, so will the Minister update us on his negotiations over agrifood trade with the EU?

The sanitary and phytosanitary agreement removes export health certificates and routine border checks, slashing costs and red tape for agrifood trade. For example, businesses will save up to £200 per shipment, making trade cheaper and easier. The Conservative party wants to put those costs back.

My right hon. Friend will know that the UK and EU financial systems are closely linked by cross-border capital flows that support jobs on both sides of the channel. Regulatory co-operation is beneficial for financial stability, but our ability to diverge from some of those regulations can also support our competitiveness. Will the Minister set out a bit more about how he is working with the Treasury to ensure that the UK’s engagement with the EU on financial issues balances our strategic sovereignty and autonomy with our economic prosperity?

That is precisely why the Government take a pragmatic approach. We choose to align in areas where it makes sense to do so. Where it makes sense to diverge, we will also continue to do so. We are always driven by our national interest.

Given the strength of power shown by the EU to the US, not only is the relationship with Europe more strategically important than ever, but it matters because of the £90 billion black hole in our economy and to people such as Hazel from Tring, whose medical devices family business has been cut by costs and bureaucracy since Brexit. When will the Government finally start taking seriously negotiations on a new EU-UK customs deal?

On the hon. Lady’s first point, we agreed the new strategic security and defence partnership with the European Union in May last year, which is absolutely crucial. On the point about the food and drink agreement, we agreed just before Christmas that that will be completed by the time of the next summit.

A close and strong relationship with our European partners is vital to our interests. Mid Sussex is home to high-tech life sciences companies such as CSL Behring and Roche Diagnostics. The regulatory and trade barriers put up after Brexit have made business harder for them. With a mercurial Administration in the White House, as evidenced this week, surely it is time for the Minister to get behind Liberal Democrat calls for a bespoke customs union with the EU.

Our democratic mandate from the general election is clear: we will not rejoin the single market or the customs union, or go back to freedom of movement. However, what we do, and what I do every single week, is negotiate that closer UK-EU relationship, which is in our national interest. The hon. Lady and her colleagues should support that.

My hon. Friend is absolutely right. The Leader of the Opposition should have risen to the occasion yesterday in a profound moment for the nation. She chose not to do so.

I thank the Minister for travelling to Belfast later today for the East-West Council. As he knows, the council was created to strengthen ties within the United Kingdom, and one of the impediments to those economic ties is the Windsor framework. Knowing that punitive measures are still to be implemented, including customs required on parcels moving from one part of our country to another for ordinary consumers, does the Minister recognise that in building a better relationship with the European Union more pragmatism is required when it comes to Northern Ireland?

I look forward to visiting Belfast later today. The right hon. Gentleman is absolutely right that the East-West Council is an important part of our “Safeguarding the Union” arrangements. I certainly take a pragmatic and proportionate approach to the Windsor framework, which is one of the reasons I am so keen to get the food and drink agreement with the EU implemented as soon as possible, which, as the right hon. Gentleman knows, will mean we can reduce the levels of checks in the Irish sea.

I call the shadow Chancellor of the Duchy of Lancaster.

Since the Paymaster General was last in the Commons, the Health Secretary has said that Britain should rejoin the customs union, the Deputy Prime Minister has suggested rejoining the customs union, 13 Labour MPs have gone against the Whip and voted with the Liberal Democrats in favour of a customs union, 80% of Labour voters at the last election have said they want to rejoin the customs union, and the Business and Trade Secretary has said that it would be “crazy” not to join the customs union. It would seem that the only people in Labour opposed to the customs union are the Prime Minister and the Paymaster General. The right hon. Gentleman will be pleased to hear that in this one regard, I do not think he is crazy at all—I think he is doing the right thing. Will he tell the House why he thinks all the other members of the Labour party are so wrong?

There is a real issue of democracy here, in the sense that we won a general election with a mandate to negotiate a closer UK-EU relationship. It is in our national interest to do so, and we have set out the red lines within which those negotiations are taking place. Listening to what the shadow Chancellor of the Duchy of Lancaster is saying, it seems he has suddenly pivoted to supporting my approach—how welcome that would be.

I certainly support the right hon. Gentleman in telling the rest of the Labour party that they are wrong, although, given the success of the Labour Back Benchers in forcing U-turns on the Prime Minister recently, I wonder how long that position will hold.

Earlier this month, the Prime Minister told the BBC that he wants “closer alignment” with the single market—a serious policy development on which we have had no statement in the Commons. I hope that will be addressed very soon. Closer alignment will, of course, mean dynamic alignment, which will mean Britain following rules over which we have had no say. The Opposition will respectfully oppose such a move. In November, Downing Street sources told journalists that it was accepted that the UK would have to pay billions of pounds for closer alignment and market access. Will the Paymaster General confirm to the House that that is his understanding?

To clarify, there are no access fees in regard to either the emissions trading system linkage or the food and drink agreement that is being negotiated. That is absolutely clear. In terms of moving forward, we take pragmatic decisions in the national interest in various sectors, which is why we opened negotiations on electricity trading before Christmas. The hon. Gentleman has crystalised the choice at the next general election: this Government are negotiating a deal that will bear down on food and energy bills, give law enforcement more tools to keep our country safe and create jobs; the Conservatives, for ideological reasons, are setting their face against those things. I would welcome that debate with them.

I call the Liberal Democrat spokesperson.

We expect an EU reset Bill in the coming months to update the arrangements around our relationship with our European neighbours. Following the terrible Brexit deal delivered by the Conservatives and cheered on by the hon. Member for Clacton (Nigel Farage), which trashed our economy and our international standing, a reset is essential, and we welcome it. Does the Minister agree that Parliament should have the ability to fully scrutinise the legislation to ensure that the Government deliver the change that we need and that we can hold Ministers’ feet to the fire as they set up new structures or committees as needed? To that end, will he assure the House that the Bill will contain enough detail to allow meaningful democratic accountability and that the specifics will not be kicked into secondary legislation?

Well, on the basis of my exchange with the shadow Chancellor of the Duchy of Lancaster, I thoroughly look forward to bringing the Bill to the Commons and debating it fully. I can assure the hon. Lady that what we will be debating is why the Government’s approach is good for jobs and how it will bear down on bills for consumers. Members should not just believe what I say, but look at what the supermarkets said about the deal that was struck last year. I will also welcome a debate about how we will reduce trade barriers and costs for businesses. It is the Conservatives who want to put red tape and costs back on businesses. Good luck to them with that argument.

Yesterday, the Trade Secretary was the latest senior Government figure to break ranks by saying that it would be “crazy” not to look at a customs union with the EU. That position is already supported by the Prime Minister’s economic adviser, the Deputy Prime Minister and the Health Secretary. Since leaving the EU, many businesses including those in my constituency have found it harder to trade with our neighbours, which is having an obvious impact on the economy. The Government have changed their mind on many things since the last election, having said that they definitely were not going to. Does the Minister accept that it would save us all a lot of time, be the single biggest lever that the Government could pull to generate growth, and give those on his own Benches something that they are crying out for if he just agreed to crack on and start negotiations for a bespoke customs union with the EU?

No, and the situation is not as the hon. Lady has described. The work that the Government are doing in building a closer EU-UK relationship is crucial, and we can do it alongside a trade deal with India and an economic deal with the United States that is saving jobs at Jaguar Land Rover. The Government’s position is in the national interest, and we will continue to pursue it.