UK pushes to be included in EU ‘Made in Europe’ policy as reset talks stall

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UK in EU Made in Europe talks

Highlights

Chancellor John Healey will urge EU finance ministers in Dublin to include the UK in the bloc’s 'Made in Europe' industrial policy to benefit British businesses.
A UK-EU reset summit has been postponed from July 22 to November 6 or later, amid disagreements on public spending limits for EU-only products affecting UK industries.
Britain’s participation in 'Made in Europe' requires European Parliament approval, facing resistance from France and concerns over shifting production from the EU to the UK.

Healey’s pitch ahead of Dublin talks

As reported by the Financial Times, Chancellor John Healey is set to tell EU finance ministers on Friday that Brussels should avoid repeating the breakdown seen in earlier defence co-operation with Britain and should design its industrial policy to include the UK.

Government insiders say Healey plans to signal in Dublin that London is willing to negotiate a broader reset deal with the EU, provided Andy Burnham’s government can show it delivers benefits for people in Britain. Ahead of the talks, Healey says closer ties with the EU would give British businesses across the UK better access to supply chains and customers needed for growth.

Healey, who has been finance minister since July, is seen by some Labour MPs as less enthusiastic about closer EU ties than other figures in the party. Rachel Reeves, the former chancellor, had made repairing the economic damage from Brexit a central part of her growth agenda in March.

Industrial and political obstacles remain

Healey is using the informal Ecofin council to call for stronger European unity and to warn against a repeat of the dispute over Britain’s proposed participation in the 150 billion euro Security Action for Europe defence fund. That effort collapsed in November last year after Britain rejected what it viewed as an excessively high multibillion-euro entry fee.

A planned UK-EU summit aimed at agreeing reset measures has already been postponed from July 22 to November 6, and EU officials say it is now pushed back again until at least late November. British officials want the summit to address concerns that limits on some public and corporate spending to EU-made products could hurt UK industries including cars and chemicals.

There is also a separate disagreement over a proposed youth experience scheme, with the EU seeking a large number of visas for its citizens to live, work and study in Britain, as well as access to UK universities on a home-fees basis. UK Treasury officials say Healey wants closer partnership with the EU in technology, defence and manufacturing, while officials on both sides have already started talks to avoid electric vehicle tariffs due from January 1 under the post-Brexit trade deal.

EU member states have told Britain that any inclusion in Made in Europe would still need approval from the European Parliament, meaning it cannot be guaranteed in a reset package. One EU official says Britain may find support among many member states, but faces resistance from France and the parliament, both of which may struggle to justify shifting production from the EU to the UK.

Our earlier article on European carmakers’ push to delay tighter UK-EU post-Brexit rules of origin for electric vehicles explained that, under the current timetable, many models could fail to qualify as EU-made and face 10% tariffs. We noted industry warnings that Europe’s battery supply chains are still too dependent on China, and that manufacturers want the EU to extend the phase-in period to avoid higher costs and competitiveness losses in UK-EU trade.

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