Labour’s Brexit Reset

By Jack Douglas

In it’s election manifesto for 2024, the British Labour Party promised a “reset” to the UK’s relationship with the European Union that would “make Brexit work” (1). The Agreement announced at Lancaster House in London on Monday, May 19th 2025, by UK Prime Minister Sir Keir Starmer and President of the European Commission Ursala von der Leyen marks the first sign of progress towards that commitment.

Since Brexit officially took place on 31st January 2020, relations between the UK and EU were governed by the Trade and Cooperation Agreement negotiated by the Boris Johnson government. Its arrangements were unsatisfactory to many, as it took the rest of the UK out of the EU Single Market but left Northern Ireland within it, so as to prevent any kind of border on the island of Ireland. This created a customs border in the Irish Sea, restraining internal UK trade with red tape. Trade with Europe as a whole was also hamstrung, despite it being our largest import and export market. Until now the only alterations to this state of affairs was the Winsor Framework agreement of 2023, which sought to resolve the Irish Sea trade border issue with green and red lanes for goods at commercial ports, as well as a Stormont brake on some EU regulations.

In response to Labour effectively renegotiating his government’s deal, Boris Johnson has said the Lancaster House agreement makes the UK an “orange ball-chewing, leather-trussed gimp” (2). A typically Johnsonian comment in its bewilderingness.

Labour had specifically said it would seek to conclude a “Veterinary agreement” with the EU. This would create a common sanitary and phytosanitary area, with the UK aligning with EU standards on plant and animal goods. This is so far the most concrete part of the agreement as announced and is expected to make it much easier for UK farmers, and others businesses involved in the agri-food sector, to export into the EU. As well as making imports from Europe much cheaper for us, thus hopefully lowering food prices in shops. All told £9bn will be added to the UK economy through this deal (2). It will come as particularly tremendous news to agri-food businesses in Northern Ireland, as the agreement will remove the need for customs checks on their goods crossing the Irish Sea between NI and the rest of the UK. If implemented, a big facet of the ‘Irish Sea Border’ so lamented by Unionists will be removed after this Agreement. If I had a cow from County Down, for instance, but want to sell it in York for whatever reason, I could now ship it over without any customs red tape.

It was in return for this generous access to the European Single Market, it seems, that Labour’s negotiators agreed to the fishing concession. EU fishers will continue to have a quota in British territorial waters until 2038. This provision has received deep criticism from many UK fishers, who argue this will hobble the industry for decades. The UK Government also announced an investment fund for coastal communities alongside the European deal, an attempt to soften the blow perhaps (3). Another provision of the agreement, anathema to Brexiters, allowed a role for the European Court of Justice in adjudicating claims regarding whether the UK does align its standards in food and plant goods with the EUs to the necessary extent, and if it doesn’t, in determining if that harms EU trade.

The Lancaster House Agreement also includes a commitment to link the carbon emissions trading schemes of the UK and EU. This effectively exempts both from each other’s future carbon tax regimes, with the EU’s coming into effect in 2026 and the UK’s in 2027. A statement from Downing Street declared this would prevent UK firms paying up to £800 Million per year into the EU budget. Steel and cement manufacturers are expected to benefit the most from this section of the agreement (2). This section also aims to foster closer collaboration on climate issues. It commits the UK to an emissions reduction pathway at least as ambitious as the EU’s. while the UK’s net zero targets are already on par or more ambitious than the EU’s, whose who want to role back or adjust those targets argue this agreement removes the UK’s sovereignty to make or move it’s own climate goals. Richard Tice, of the Reform UK party, is one such, vowing to “repeal everything” if Reform wins power. The UK will also, following further negotiations, hopefully gain direct access the EU’s shared electricity market and so reduce the cost of energy.

Finally, the agreement contained legal commitments to negotiate deals on a number of further schemes to reduce friction between the EU and UK. Amongst these are a youth experience scheme that would allow young people from the UK to travel and work in the EU and vice versa. This would be restricted to those under 30 years of age and have a numbers & time cap however. The UK is also seeking to rejoin the Erasmus+ study and internship programme within a year. The European Commission has also agreed UK holidaymakers can again use passport E-gates when arriving in European airports provided the destination country also agrees. So a euro holiday in 2026 should hopefully involve less airport hassle (4). And a defence and security pact between the UK and EU was also outlined. Set to be formalized “within weeks” according to Von der Leyen (3), it is already agreed UK military and defence officials will meet EU counterparts every 6 months to coordinate sanctions and foreign policy in general. Intelligence sharing is also to be increased. A particular proviso was that the UK security services will have access to European facial recognition data. The UK Government says this pact will “pave the way” for the UK getting access to the new ‘Security Action for Europe fund’. A loan scheme from the EU to be used to fund defence projects (5). And increase border security.

Reaction to the Lancaster House agreement ranged from cautious lukewarmness and vehement opposition, to those who see it only as a stepping stone to a closer relationship with the European Union. In Northern Ireland, First Minister Michelle O’Neill of Sinn Fein recognized the agreement represented an improved relationship, which is desirable in itself, but cautioned “the devil will be in the detail”. DUP leader Gavin Robinson said that so far he sees only “superficial” progress in removing red tape on NI’s trade. The Alliance party leader, Naomi Long welcomed the agreement as a “first, positive step” towards mutually beneficial and closer economic ties to the EU for NI and the UK. Her party colleague Andrew Muir, the NI Agriculture Minister, praised the Government’s “practical solutions” to the damage done to the UK economy by Brexit. The SDLP’s Claire Hanna had the most positive reaction of NI political leaders to the agreement. She declared it a “substantial” achievement, noting the progress in removing customs red tape and on youth mobility. In contrast, Jim Allister of the TUV dismissed the agreement, saying it “copper-fastens” NI as EU territory (6).

Across the water the reactions from the right of British politics mirrored that of Mr Allister. No sooner was the agreement announced than the brexiteer press cried ‘surrender!’. Tory leader Kemi Badenoch said Labour had made the UK a “rule-taker” from Brussels once again. With the ECJ able to have a say of UK trade goods standards, dynamic alignment with the Single Market and extended fishing rights conceded. All this is “very concerning” as far as she is concerned. Nigel Farage, Reform UK leader, bemoaned that the agreement means the “end of the fishing industry” (3). Liberal Democrat leader Sir Ed Davey perhaps summed up the mood of many when he observed “our country has moved on” from the “Brexit wars” of the late 2010s. overall the Lancaster House agreement hasn’t generated massive public opposition. Business interests mostly welcomed it, with organisations like the NFU expressing support. Only the National Federation of Fisherman’s Organizations made only negative comments on it (2). Commercial ports around the country also expressed disappointment, citing the sums they’ve spent on upgrading customs facilities to carry out the checks the agreement at Lancaster House has done away with.

The agreement in some ways was a test of the waters, to see what some dynamic alignment and limited sectoral integration would provoke. If the agreement soon brings tangible benefits, further movement towards the EU may occur on the economic level. Labour clearly wants to make “Brexit work”, but they are not yet ready to undo it, to the disappointment of some.

Sources

[1] Labour Party Manifesto 2024. Page 193

[2] The Guardian, “EU reset deal puts Britain back on the world stage” says Keir Starmer. 19/05/2025, by Jessica Elgot & Lisa O’Carroll.

[3] Politico, UK-EU deal unpacked: All the Brexit red tape set for a chop. 19/05/2025, by Sophie Inge, Jon Stone and Charlie Cooper.

[4] BBC, The new UK-EU deal at a glance. 19/05/2025, by Sam Francis.

[5] Al Jazeera, UK, EU reach landmark deal: All you need to know.

[6] BBC NI, Northern Ireland’s politicians react to UK-EU deal. 19/05/2025