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  1. Preparing For Power
25 January 2023

Labour considering plan to soften Brexit

The party could embrace dynamic alignment with European regulations to boost economic growth.

By Rachel Wearmouth

Labour could aim to strike sector-by-sector trade deals with the EU in a bid to boost the UK’s stagnant economy. Shadow cabinet ministers have been discussing how Britain would achieve frictionless trade with the bloc from outside the EU if the party wins power at the next election.

Sources have said that, while freedom of movement would be off the table, a Labour government may look to negotiate deals for specific sectors based on dynamic alignment with EU regulations. This would not mean the UK rejoining the single market or the customs union, as Keir Starmer has ruled out membership of either. But where British and EU standards closely match, such as in engineering, agriculture, chemical industries and pharmaceuticals, Labour believes quick agreements could be brokered with Brussels, based on the UK maintaining equivalent standards.

“Both sides understand the parameters,” one frontbencher told the New Statesman‘s Andrew Marr. “If they say fine, but you have to have freedom of movement, they know we can’t accept that. But they are talking seriously. We have no problem with dynamic alignment.”

Starmer and the shadow chancellor Rachel Reeves last week visited the World Economic Forum in Davos. Reeves used the visit to underline that Britain would be “open for business” under a Labour government and would seek to “bring global investors back”.

Earlier this week, Tony Danker, the director-general of the Confederation of British Industry, warned that the UK was lagging behind other Western countries in economic growth. He urged Rishi Sunak to show more ambition, and warned that the government’s Retained EU Law Bill, which would repeal or replace up to 4,000 laws, was “creating huge uncertainty for UK firms”.

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The Prime Minister strongly denied reports last year that ministers discussed opening talks with Brussels over a Swiss-style deal, which would have given the UK access to the European single market and necessitated looser immigration controls.

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