EU realignment won’t save the British economy

This article was first published in LBC.

With Keir Starmer’s premiership hanging by a thread, the King delivered His Government’s legislative programme for the year ahead.

This included legislation “to strengthen ties with the European Union”. The proposed European Partnership Bill will place new rules agreed with the EU on agri-food, electricity, and emissions trading onto the British statute books. Alongside this, a parallel Regulating for Growth Bill will compel British regulators to accede to EU-aligned rule-making.

The King’s Speech was the next step of a pivot the Prime Minister had announced earlier in the week when he stood before the cameras and declared that his Labour Government would be “defined by building our relationship with Europe”.

Following Labour’s worst local election drubbing in thirty years, and with close to 100 of his own MPs calling for him to step down, Sir Kier Starmer has bet his political survival squarely on returning Britain to Brussels’ orbit.

This would entail ‘dynamic alignment’, with British businesses forced to adopt current EU regulations and commit to adjusting in line with them indefinitely, even if they do not trade goods with the EU.

It is a strange wager. People still insist that Brexit was an act of “economic self-harm”. Yet the economic case for dynamic alignment is not a compelling one at all. The Growth Commission estimates that adopting the EU’s SPS (sanitary and phytosanitary) regime (which governs trade of plants, animals, and food products) would cost the British economy £15 billion, while undoing the advances Britain has made in precision-breeding thanks to the Genetic Technology Act 2023.

This drift would also place Britain’s free trade agreements, particularly its membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), under severe strain.

Linking Britain’s carbon prices with the EU’s would increase prices by approximately 50% — surely the wrong moment for our households and businesses.

If Britain were to proceed to the logical endpoint of an ever-closer alignment with the EU (i.e. joining the Customs Union), the Prosperity Institute estimates that this decision would shave of 0.5% from Britain’s GDP in its first year.

Dynamic alignment would also see Britain contribute to the EU’s cohesion funds, subsidising EU regional development programmes that Britain would have no benefit from.

The EU’s relationship with non-EU, EEA (European Economic Area) member states present a cautionary tale. In January 2025, the Norwegian government collapsed after failing to agree to EU-imposed energy rules.

After years of resistance, Switzerland was finally brought to heel in 2024. The so-called “Stormont brake”, devised as part of the Windsor Framework, is supposed to allow Northern Ireland some rule-maker status, but has proven to be a work of fiction. This is the future the Prime Minister offer to Britain.

The EU is not without its economic woes. The Eurozone is forecast to grow by only 1.2% this year, with Germany just emerging from two consecutive years of economic recession, while Italy and France are expected to grow by only 0.6% and 0.9%, respectively. Britain, on the other hand, has made great strides since leaving the EU, supplanting Germany in 2024 as the world’s fourth-largest exporter.

Acceding to the CPTPP has given Britain access to a market with over 500 million consumers, valued at £12 trillion, and is poised to be one of the most dynamic blocs in the future. Lighter rules on AI technology and precision breeding now place Britain at a competitive advantage, which would be lost if Britain aligns with the EU.

It should be clear that not only is EU realignment unlikely to save Keir Starmer’s premiership, but it is even less likely to save Britain’s economy.