Rachel Reeves expressed openness to exploring the possibility of the UK joining a pan-European customs framework, signalling a shift in the government’s approach to post-Brexit trade relations. Speaking on Sky News’ *Sunday Morning with Trevor Phillips*, the Chancellor said the government was “absolutely happy” to consider constructive proposals, such as membership in the Pan-Euro-Mediterranean (PEM) Convention, provided they align with the administration’s red lines set out in its manifesto.
Her remarks followed comments earlier in the week by EU Trade Commissioner Maroš Šefčovič, who suggested that Brussels would be open to the UK joining the PEM Convention as part of an ongoing “reset” in UK-EU relations. The PEM Convention, established in 2012, aims to streamline trade between 25 countries across Europe and North Africa by implementing common rules and facilitating free trade agreements. It reduces or eliminates tariffs between member nations, creating a more cohesive trading environment.
Reeves acknowledged the challenges posed by the trade deal negotiated by the previous government, describing it as insufficient for both small businesses struggling to export and larger companies facing logistical hurdles. She criticized the previous administration’s unwillingness to address these issues, stating that her government is “grown up enough” to admit where problems exist and explore potential solutions. However, she underscored that any proposals would need to respect the government’s red lines, particularly the commitment not to rejoin the EU single market or reinstate freedom of movement.
The Chancellor’s stance appears to diverge from that of the Shadow EU Minister Nick Thomas-Symonds, who recently ruled out plans to join the PEM framework. Despite this, both Labour leader Sir Keir Starmer and Business Secretary Jonathan Reynolds have left the door open to future membership, emphasizing that any decision would have to adhere to their stated policy positions on trade and sovereignty.
Reeves also reiterated her focus on economic growth, asserting her determination to restore momentum to the UK economy. Addressing recent controversies, she defended the government’s October policy adjustment, which extended the time frame for non-domiciled individuals to bring money into the UK under reduced tax conditions. This move was intended to stem the exodus of wealthy individuals from the UK, which had raised concerns about the country’s ability to retain high-net-worth taxpayers.
Šefčovič’s remarks, coupled with Reeves’ open attitude, have reignited debate about the UK’s post-Brexit economic strategy and its willingness to engage in closer cooperation with the EU. Critics have questioned whether these overtures mark a softening of the government’s stance on Brexit-related policies, while supporters argue that pragmatic steps like joining the PEM Convention could provide much-needed relief to struggling businesses and bolster trade.
As discussions between the UK and EU continue to evolve, the possibility of re-engagement through frameworks like the PEM Convention represents a potential shift in the post-Brexit landscape. Whether this leads to meaningful policy changes remains uncertain, but the dialogue reflects a broader effort to address the economic challenges posed by the existing trade deal.
