Reeves steps up EU ties as Streeting backs return – Daily Business

Rachel Reeves heads to Paris for G7 talks (pic: DB Media Services)

Rachel Reeves will this week become the first chancellor to visit Paris since Brexit as she steps up the Labour government’s bid to rebuild ties with the EU.

The meeting with G7 finance ministers and central bankers is billed as strengthening the UK’s economic and energy security in response to the conflict in the Middle East.

However, Ms Reeves also sees it as an opportunity to reassert her ambition to ensure the UK is at the heart of Europe, deepening ties and driving practical progress to reduce trade barriers.

Her trip comes as former Health Secretary Wes Streeting declared his intention to fight for the Labour leadership and eventually take Britain back into the EU.

Mr Streeting yesterday called for a “new special ­relationship with the EU”, said the party should seek a new mandate for rejoining in its manifesto at the next general election.

“Britain’s future lies with Europe, and one day back in the European Union,” he told a rally of party supporters. His comments seem destined to put the issue at the heart of a new leadership campaign against Andy Burnham, the mayor of Greater Manchester, an EU sympathiser who hopes to contest the Makerfield seat where 65% of voters backed Brexit in 2016 and currently have a Reform MP. 

As such, any Labour campaign for a return to the bloc risks alienating Leave voters who deserting Labour to back Brexit supporting Boris Johnson in 2019. Perhaps with that in mind Mr Burnham said the EU would not be his immediate concern.

“Britain has got to focus very much on the here and now and the issues that are affecting people,” he said. “We can’t just carry on as we are. We’re going to change the conversation in this campaign.”

Sir Keir Starmer has indicated that he wants closer ties to the EU but has so far ruled out re-joining the single market or customs union. However, with a reputation for u-turns and growing pressure to change course, the Prime Minister’s position could change.

Ms Reeves’ immediate concern is responding to the various conflicts affecting the economy. Ms Reeves will press for coordinated action to limit inflation and supply chain pressures, and restore freedom of navigation through the Strait of Hormuz.

She will also lead discussions on support for Ukraine, reiterating the UK’s backing for Ukraine and its IMF programme. Ms Reeves will underline the need to maintain pressure on Russia , including on energy revenues, and agree credible, coordinated approaches to Ukraine’s ongoing financing needs with partners.

Later this week she is expected to announce further support with the cost of living in response to the war in Iran, which threatens to push up prices for UK households.

The Treasury is also set to unveil a sweeping overhaul of the ring-fencing regime that was set up after the 2008 financial crash, separaring retail and investment banking.

It is understood Ms Reeves has signed off plans that will release billions of pounds of additional lending capacity at five high street giants.

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