Britain’s chancellor: closer relations with the EU are in our national interest

So, I'm quite strong terms today. How, I believe, that's closer alignment, better. trade relations with. the EU is in our national interest. The most recent numbers suggest. that the GDP hit could be worth 8% of GDP. From, Brexit. And at a time when, you know, we are looking for. a stronger growth, improvements. in living standards, lower prices in the shops, you know, it would be foolish. to just carry on as we are.

in terms of our relationship with the EU. And when we said, when we came into office. in the election campaign. that we wanted to reset our relations. and we've already made, good progress. So, Erasmus, the scheme where young people can go. and study, abroad, we're bringing that back. We also agreed. last year that we were going to negotiate. a deal on food and farming. A veterinary deal with the EU, the on energy trading, on electricity. trading, a create that more single market, which is so important,

especially when we see what's happened in the last few weeks. play out in the, in the Middle East. can I bring you specifically. to the question of alignment? You struck a deal in May 2025, mostly, mostly food, which boost GDP by that point 3% by 2040. What other sectors are you thinking about? What does your negotiating strategy. when it comes to alignment now involve? You suggested. in the lecture that you gave today that the UK should align. is the norm, apart from exceptional cases. So that sounds like really quite.

an ambitious pitch for the UK to be in. step with the single market. and not something that sector by sector. is that is that how you're thinking about it now? So we should be ambitious. because we want the jobs, we want the investment. And we do risk being stranded. between big trading blocks. And we will miss out on the benefits. and also be at risk. of protectionist policies. from those, blocks. So it makes sense to get closer.

and to align, more. what's the reaction if the EU bid. so far they've been worried. about cherry picking. They've seen overtures. from from British governments before. So it looks different. I'm not sure if they have said that many overtures before. I mean, we left almost ten years ago. and there was basically no if chose that eight years. And then Labour came into office. a year and a half ago. and had a manifesto commitment. and were elected on that promise to reset. There's been there's been vague. talk of, well, being closer to the in the spa.

within the first year, in the first few months of the government, we had that summit in London, hosted by the prime minister. with Ursula von der Leyen, the president of the European Commission, to reset that relationship. And it was at that summit. that we made those commitments around. Erasmus, around energy and electricity, around, usability. and around food and farming. We will conclude those negotiations are soon. And I have today, the sort of five. the starting on where we want to go next.

and that is closer alignment. Now our tomorrow I'm going to be in Spain. with my Spanish opposite. number, Carlos Cuerpo, their finance minister. I've been in touch today, with finance ministers. from other European countries. Setting out to them. what I've set out in my speech, today. And I can tell you. the ambition in Europe is strong, too, because they can see in a world. where you've got overcapacity in some countries, you've got other countries increasing tariffs. that we as allies, as friends, as neighbors,

as big trading partners. who have shared interest. not just on the economy, but also in our own security. We've got to work together. if we're going to be able to achieve. those common, goals. And I can tell you that the, the, the ambition. is that not just in our country, but in other European countries as well. And so the concerns about cherry. picking have been laid to rest. Is this should we think about this. as an opening gambit?

It's an attempt to start a conversation. about what. Britain's relationship. with the EU might look like. Or is this a formal proposal? For what? What being close to single market will be? We have already, changed our relationship. and we have done a sectoral level. So food and farming is a sees a macro macro. economically not very big sectors. 0.3% of GDP by 2040. But when the economy is growing by 1.3%.

a year, 0.3% is a pretty big, uplift, to the size to the level of GDP. Our economy puts almost 10 billion pounds. So yes, I do say that that is. and that's just food and farming. That is not usability. It's not energy or electricity. Trading. That's just one part of a deal. So yes, I would say that is significant. And actually just that is worth more. than any of the other trade deals. that we've managed to secure. And that is because. despite all the barriers. that have been put in place,

Europe remains our biggest trading partner. Almost half our exports. go to the European Union, and that is why the biggest prize. comes from close relationship. and and given that Chancellor, why not be bolder? 54% of people now want to rejoin the EU, 82% of Labour. Party voters say they want to rejoin the EU. Are your members wrong? We voted. as a country to leave almost ten years ago. I voted to remain the campaigned for remain.

If we went back ten years and Parliament. for exactly the same way again. But we have to move on. And that period in June. 2016 was an incredibly devices. time for our country. And people might like to turn back the clock. and might like their answer to have been different. But I do think rerunning a referendum. would not be in our national interest. so that the Greens have promised to do this. The Lib Dems have promised to rejoin the customs union.

So if not rejoining, what about the customs union? At least what I focused on today in. my speech was around alignment. with the single market. in more parts of the economy, and that is where the biggest prize. is for alignment with the single market. Mark Carney spoke in Davos. about middle powers and countries. that share each other's values, working more closely together. And I passionately believe that. we should work together with countries. that share our values and lives.

As I said in my speech tonight, that we risk being stranded between powerful. trading blocs. We have to. we have to decide where. our national interest lies. And I've done a great deal of thinking about where I think. the opportunities for Britain. is in regional growth. And innovation, and I and that big prize. of greater cooperation. and partnership with the EU. And if we can do those. things, there's every reason to be optimistic. about our country's future. We were already the fastest. growing European country in the G7 last year, but we have managed to reduce our budget.

deficit faster and further. than other countries in the G7. But most of all, I think we are well-placed. to take advantage. of the changing landscape. of business and society. We've got fantastic universities, we've got deep and liquid. capital markets, we've got great entrepreneurs. and an entrepreneurial culture. here in Britain. We've got to believe in ourselves. and we need an active and strategic state. working with businesses. to unlock those opportunities.

We've got the right plan for Britain. We've got to stick to that course. And the prize, if we do so, I believe, is huge.