Director Weekly  The much-vaunted reset of UK-EU relations took a significant step forward this week with the inclusion of the European Partnership Bill in the King’s Speech

Keir Starmer set the tone on Monday, promising to take “a big leap forward” around the EU-UK summit this summer. The aim is a closer relationship, he said, on trade, the economy, defence and security – which would be “a platform on which we can build as we go forward.”

Asked whether this meant ditching his manifesto red lines – staying out of the single market and customs union, and not restoring free movement – Starmer avoided a direct answer. Given that he has been robust on these points before now, this shift may prove significant – though for now, the red lines remain unchanged.

Then on Wednesday, the King’s Speech included the announcement of a European Partnership Bill to implement so-called ‘dynamic alignment’ arrangements. This will allow for implementation of the SPS agreement, still being negotiated, which will be critical for reducing border friction around animal and plant products. It will also provide for Emissions Trading Scheme (ETS) linkage – and allow for future regulatory alignment as further agreements are reached.

IoD members are both increasingly in favour of prioritising the EU in trade policy, and supportive of the principle of dynamic alignment. Yet there are some potential issues to be worked through. Chief among them is ensuring that any regulatory changes serve the interests of UK businesses, first and foremost. The government’s explainer notes on the King’s Speech state that the UK will retain decision-making powers, but the devil will be in the detail. We will be campaigning on this key principle as the Bill progresses through Parliament.

We will also be keeping up the pressure on the government to deliver progress on recognition of professional qualifications. I regularly hear about the barriers holding back UK businesses from winning more business in the EU, as well as the recruitment challenges that many face due to the current rules. It is another area where there appears to be the political will for change; the question now is one of delivery.

Will the EU prove a willing partner for the reset? In general, yes: the attitude among policymakers and business leaders alike is generally positive and optimistic, as I heard again at a recent business summit in Berlin. But there are still hurdles to be cleared. The EU’s ‘pay to play’ principle is one – it was the rock on which closer defence cooperation plans foundered last year.

European leaders will also be wary of UK political instability. The issue is not, now, the immediate short term: Starmer is all but certain to still be prime minister for the summit in July, even if his days are numbered. And his potential challengers look no less eager to pursue the EU reset.

But Reform’s success in the local elections has been noted; there will be wariness among EU leaders about making commitments that a future government, influenced or led by Nigel Farage, might soon roll back on.

For now though, the direction of travel is clear. It’s vital that the government does all it can to maximise the opportunities with the UK’s nearest, biggest – and most stable – trading partner. We will continue engaging closely with government to ensure that policy fully serves UK business interests.

Your priorities for the UK-EU reset

What would you like to see the government push for at the next UK-EU Summit? What would your priorities be for improving the trading relationship with the EU?

Share your views with Emma Rowland at [email protected]