Lib Dems claim deeper trade deal with EU would raise £25bn of tax revenue
A deeper trade deal with the EU that stops short of joining the customs union or single market could bring in £25bn of tax revenue and pay for reversing benefit cuts, according to research cited by the Liberal Democrats.
The party is writing to all Labour MPs this week asking them to join forces in a push for a much more comprehensive deal with Brussels, saying that backing closer trade ties would help revive the public finances.
It said research from the Best for Britain campaign group has found that GDP would be boosted by 2.2% as a result of deep alignment of goods and services, while staying within Labour's red lines of no return to the single market or customs union.
A new House of Commons library analysis, commissioned by the Lib Dems, found that a 2.2% boost to GDP would bring in roughly £25bn of extra tax revenues.
The party acknowledged that the estimates from the Commons library should be considered rough and a rule of thumb, as tax generated by higher growth depends on how it takes place.
However, it said the boost to tax revenues from a fuller deal with Brussels should be more than enough to reverse the winter fuel allowance withdrawal and proposed £5bn cuts to disability benefits.
In his letter to Labour MPs, Calum Miller, the Lib Dem foreign affairs spokesperson, will say his party wants to work constructively to secure a new trade deal with Europe in order to boost public finances.
'A far more ambitious trade deal with Europe, including a new UK-EU customs union, would be the single biggest thing ministers could do to boost growth and fix the public finances,' he said.
'The Liberal Democrats stand ready to work constructively with Labour MPs to boost trade with Europe and avoid savage cuts for vulnerable families and pensioners.'
The move comes as Keir Starmer prepares to host a crucial summit with Ursula von der Leyen, European Commission president, on Monday, at which a deal is expected to be signed on some greater alignment on defence, fishing and food, alongside other areas. Easing trade restrictions is expected to be an ambition rather than a concrete plan.
More than 60 Labour MPs have already urged the government to go further than its plans at Monday's summit – including on a youth mobility deal where a time-limited version is now under discussion.
At the same time, more than 100 Labour MPs have signed a letter calling on the government to back down from the welfare cuts, and many of them regard the means-testing of the winter fuel payment as even more toxic with voters.
Ahead of the UK-EU summit, the chancellor, Rachel Reeves, said it was a 'step towards' a deeper and ongoing partnership with Europe, saying any deal struck next week will not be a 'one-off'.
In an interview with the Guardian on Friday, Reeves suggested the government was looking for closer ties with Europe beyond what was on the table this coming Monday, adding: 'There will be future areas in which we can do more.'
Sign up to First Edition
Our morning email breaks down the key stories of the day, telling you what's happening and why it matters
after newsletter promotion
She said the government would show there had been a decisive break with the ideological Brexit battles of the past, saying 'there is a lot of room for improvement' for ways to trade with the bloc.
Asked if the UK had raised its future sights beyond fixes, such as a veterinary deal that was set out in the Labour manifesto, Reeves said there would always be the red lines of no single market, customs union or a return to free movement, but suggested there was still more that could be done.
'We think that because of the trust we built, we can get a better deal. The European Union has understood from the beginning those red lines,' she said.
'I am ambitious for our future. This isn't a one-off. There will be things that we achieve, some concrete outcomes on Monday, but there will also be a step towards where we want to go next between our countries.
'And I see that as a journey, not that what happens on Monday is the end; there will be future areas where we can do more.'
However, Nigel Farage, whose Reform party is topping the polls, has pledged to undo any deal that Starmer strikes, saying it is a reversal of Brexit.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
BBC News
26 minutes ago
- BBC News
Public toilet restoration approved by Chichester District Council
Eight public toilets in the Chichester district will be refurbished after getting council plans follow the demolition and rebuilding of the old toilet block in Tower new Tower Street toilet, which opened earlier this month, cost more than £200,000 and has been said to be inspiring "envy" in other areas after receiving positive Google reviews. The cost of the latest scheme has not yet been revealed but will be made up of money from the Asset Replacement Fund and from reserves. Chichester District Council does not legally have to provide public toilets, but leader Adrian Moss said they were important to residents, adding that the Tower Street project had been "a triumph".Councillor John Cross added: "There is a bit of toilet envy going on with other district councils because our Tower Street toilets have been given a five-star rating on Google and other district councils want the same!"The toilets set for improvement are in Bracklesham Bay in Bracklesham, Pound Road car park in Petworth, Lifeboat Way in Selsey, Northgate car park in Chichester, Avenue de Chartres car park in Chichester, Hillfield Road in Selsey, Kingfisher Parade in East Wittering and Marine Drive in West council will now look for a contractor to carry out the work, which will be a phased approach over the next two years, said the Local Democracy Reporting Service.
The Herald Scotland
28 minutes ago
- The Herald Scotland
UN urges UK to negotiate new Chagos deal that allows islanders to return
But a panel of experts appointed by the UN Human Rights Council said retaining the base and continuing to bar Chagossians from Diego Garcia 'appears to be at variance with the Chagossians' right to return'. The Chagossians were expelled from the islands between 1965 and 1973 to make way for the joint UK-US base and have not been allowed to return. Although the UK-Mauritius deal includes a £40 million trust fund for the benefit of the Chagossians, the UN experts expressed concern that this would not provide an 'effective remedy' for the islanders. They also criticised an apparent lack of consultation of the islanders prior to the deal, saying: 'We are gravely concerned about the lack of meaningful participation of Chagossians in processes that have led to the agreement.' The experts added: 'In light of these significant concerns, we call for the ratification of the agreement to be suspended and for a new agreement to be negotiated that fully guarantees the rights of the Chagossian people to return to all islands of the Chagos Archipelago, including Diego Garcia.' Conservative shadow foreign secretary Dame Priti Patel urged the Government to 'do the right thing (and) stop this'. She said: 'We have been warning from the start that this deal is bad for British taxpayers and bad for the Chagossian people. 'Now even the United Nations is saying the very same. 'Labour has completely ignored this community from the get-go, and failed to consult with them at every step of the way. 'It is why I have introduced a Bill in Parliament that would block the (agreement) and force the Government to speak to the people at the heart of their surrender plans.' The deal follows a 2019 advisory opinion from the International Court of Justice saying the islands should be handed over to Mauritius. As well as the fund for Chagossians, the UK has agreed to pay at least £120 million a year for 99 years in order to lease back the Diego Garcia base – a total cost of at least £13 billion in cash terms. The deal also includes provisions preventing development on the rest of the archipelago without the UK's consent, which the Government has argued will prevent countries such as China setting up their own facilities. The agreement has also been backed by the United States. The Foreign, Commonwealth and Development Office has been contacted for comment.
The Independent
37 minutes ago
- The Independent
This vision for Britain's nuclear future is to be warmly welcomed
A politician with such a long and mixed track record as energy secretary Ed Miliband should perhaps have been more wary of declaring that nuclear power will 'deliver a golden age of clean energy abundance', and that it is 'the only way to protect family finances, take back control of our energy, and tackle the climate crisis'. Such things may yet prove to be so – and indeed investment in a new generation of nuclear power may well be inevitable. However, it is equally the case that the history of nuclear power in Britain, spanning some seven decades, has been far from an unalloyed success. At home and – sadly, more dramatically – abroad, scientists and engineers overconfident in their abilities and seized by the promise of the future have found themselves all too often watching the consequences of their complacency played out with devastating effect, most infamously at Fukushima, Chernobyl and Six Mile Island, but also at many other locations. Previous visions of a golden age melted down as rapidly as the faulty reactors. If the early post-war hopes for the peaceful use of nuclear power had been well founded, just as was claimed in the 1950s, the abundant electrical power generated by nuclear fission would have been so cheap it would have been pointless to meter and charge for it, fossil fuels would have been rendered redundant, and, as it happens, the pace of climate change greatly retarded. But it was not to be. Therefore, the public is right to be sceptical now about why, in the old and dangerous phrase, 'this time it's different'. With those heavy caveats, Mr Miliband's announcements about Britain's nuclear future are to be welcomed, and his reasoning endorsed. He is right, above all, to seek a great variety and plurality in sources of the UK's long-term energy supply. As the Germans discovered when the Nord Stream pipelines and gas supplies from Vladimir Putin's Russia were cut, it is extremely unwise to become so heavily dependent on any single source of energy. Mr Miliband declares himself an enthusiast for offshore wind, onshore wind, solar, hydro, nuclear, and even fossil fuel sources where effective carbon capture can be achieved. In the nuclear sphere, he's also correct to adopt the previous government's plans for small, 'modular' reactors, which could speed up the transition from carbon and reduce costs. The only disappointment in that area is that time has already been lost, and Rolls-Royce and other private interests are not yet in a position to make any deployment pump meaningful wattage into the National Grid before the early to mid-2030s, as Mr Miliband told the House of Commons. The £14.2bn investment in the Sizewell C plant is a more traditional kind of project, and carries the familiar risks. Mr Miliband will need to be much more specific about private sector involvement, and who will bear the financial risks for such a costly programme over such a long and uncertain timeframe. Disposal of waste and decommissioning costs will also have to be fully transparent to carry public opinion, especially for the people of Suffolk, who will be hosting this latest iteration of a long-standing lodger. Of course, it all would have been better if successive governments hadn't slowed the nuclear programme in the aftermath of successive accidents, and had found the money to invest in previous decades. In fact, the Sizewell C plant is set to become Britain's first new nuclear power station since 1995. The French have long prioritised nuclear power and weathered the recent energy crisis better than the British or the Germans, more tied as they were to foreign gas and soaring world prices. The aim now is to ensure that the new generation of nuclear power doesn't turn into a costly disaster, and can indeed help the transition to renewables and lower energy bills. Cheap, plentiful power and net zero on track? Mr Miliband may yet leave a legacy more permanent than any of his colleagues. Golden, indeed.
