Starmer’s EU reset ‘will cost billions’ and risk US tariffs, claims bombshell report | Politics | News

Sir Keir Starmer’s EU reset would cost billions of dollars, hamstring industry and jeopardize US trade, a scathing new analysis by a senior Thatcher-era minister has claimed. Policy Change The report, The Triumph of Hope Over Experience, written by the Rt Hon Lord Lilley, who as Secretary of State for Trade and Industry oversaw Britain’s entry into the EU single market, accuses the Government of trying to achieve ideological alignment with Brussels, despite Labour’s manifesto that there will be “no return to the single market or free movement”.

Drawing on the UK’s 28 years of experience in the single market, Lord Lilley warns that a reset amounts to “partial participation” in the single market, including the Sanitary and Phytosanitary (SPS) veterinary agreement, participation in the EU electricity market and the consolidation of carbon trading schemes. This triggers EU demands for financial contributions, legislative harmonization and youth mobility schemes.

The report lists significant hits. Adhering to higher EU Emissions Trading Scheme prices would add £1.1 billion annually to British firms.

Britain freezing its catch in its waters for 12 years could cost fishing concessions £500 million a year. Post-Brexit reversal of differences in crop protection products and other farming rules could add a further £500-810 million a year.

These alone dwarf the Government’s claimed £9 billion cumulative benefit over 15 years from the SPS deal; this is equivalent to just £600 million a year. Dynamic alignment between sectors will impose costly EU regulations on the 92% of UK firms that do not export to the EU, stifling innovation and competition.

The electricity market link requires the UK to adopt EU renewable energy targets and pay Brussels’ administrative costs, even though the EU exports four times as much energy to Britain. A reset also risks reimposing barriers to imports from the rest of the world to comply with EU rules, complicating agreements such as the CPTPP and exposing the UK to potential US tariffs under the Trump administration, which is wary of harmonized regulations.

Youth mobility and the revival of Erasmus

Despite the manifesto’s assurances, the EU is encouraging youth mobility and rejoining Erasmus, which is expected to cost £810 million a year – providing financial support mostly to EU students in the UK – and canceling the cheaper Turing scheme focused on British students.

Lord Lilley notes that in the past free movement in the EU has resulted in large net flows of young people, contradicting the Government’s claims of balance based on Commonwealth plans.

Lord Lilley removes the basic economic case. During 28 years of single market membership, UK exports of goods to the EU have increased by less than 1% per year. In contrast, exports to 111 WTO member countries increased by 87%.

Lord Lilley writes: “The spell did not work.”

Unilateral dynamic adjustment offers no reciprocal relief to UK exporters who already meet EU standards, while handcuffing domestic politics.

The report mocks the Government’s post-Trump turn to strategic arguments, noting that co-operation with European NATO allies does not require accepting their laws or paying billions of dollars for joint procurement.

Lord Lilley attributes these volatile conditions to negotiating naivety: agreeing to fish in advance, declaring that a reset was necessary for growth (pointing to weakness), and the absence of experienced traders or a reliable BATNA. Ministers ignored WTO SPS rules, which are already binding on the EU, and failed to demand parity on compliance.

The voices of the NFU and the city were alarmed. The report calls on ministers to step back before signing away more sovereign rights.

But Lord Lilley’s decision is bluntly branded as a bad deal born out of hope over hard-won experience, putting billions of dollars at risk while delivering meager returns. With US relations strained and domestic industries in contraction, Sir Keir’s reset faces increasing scrutiny as the true price tag is revealed.

A Government spokesman said: “The reality is that red tape at the border has cost billions of dollars, fueled inflation and stifled growth.

“No one wants to see food rotting at the border – it is a massive waste that drains money directly from the pockets of British families and businesses.

“Our SPS deal will add £5.1bn a year to the economy and cut red tape that drives up supermarket prices. This is about making sure Brexit works for the British people.”