Resetting the UK-EU Relationship (European Affairs Committee Report)

Lord Ricketts Excerpts

Thursday 26th February 2026 Lords Chamber

Moved by

[Lord Ricketts]

That this House takes note of the Report from the European Affairs Committee Unfinished Business: Resetting the UK-EU relationship (1st Report, HL Paper 202).

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, before the first debate gets under way, I want to highlight the four-minute advisory time for Back-Bench contributions. This is designed to ensure that the debate can finish within three hours, in line with the usual timings for Thursday debates and so that the House can rise at a reasonable time this evening. I therefore urge noble Lords to keep their remarks within four minutes to meet those aims.

[Lord Ricketts (CB)]

My Lords, I am delighted to lead this debate on the report from the European Affairs Committee, which it was my privilege to chair until last month, when I handed the baton to the noble and gallant Lord, Lord Stirrup. I am glad to see such a distinguished group of people in the Chamber to debate this report, which shows how salient the issue is right now. I thank the Government for getting their response to us in a timely way, which enables us to hold the debate now in good time and at an important moment.

This was not an entirely straightforward report to produce. We thought it was essential that the House have an overall assessment of what used to be known as the reset, which is, after all, the Government’s flagship policy towards the EU. As the only committee of Parliament conducting systematic scrutiny of the Government’s European policy, we concluded that we were the right people to do it.

It was a long inquiry which covered a wide range of complex issues. We found it quite difficult to get our heads around exactly what the reset covered, since the Government did not produce a White Paper on their negotiating objectives. Initially, we had only the Labour Party manifesto to go on. We also found that we were aiming at a moving target, because in the course of our work, the range of the reset increased. A number of important areas were added at the May 2025 UK-EU summit.

Members of the committee held deep and very different convictions about what the reset should cover, and indeed on whether it was necessary at all. Although we strove to find a consensus, that proved elusive. We therefore took the unusual, although not unprecedented, step of voting on the committee’s report. As a chair, I would always prefer to have a reconciliation of differences, but if that is not possible without a meaningless fudge, I think it more useful to the House to have different views clearly set out. Members will have seen that in appendix 9 of the report there is an alternative summary and the outcome of the voting on it.

Given all those circumstances, I am very grateful to all the members of the committee who contributed through this long inquiry. We all owe a particular debt of gratitude to our committee staff: Jarek Wisniewski, Brigid Fowler, Tim Mitchell, Tabitha Brown and Luisa Jaime Nunez, assisted by our press adviser Louise Shewey. I also want to thank our national parliament representative Jack Sheldon and his assistant Maherban Lidher for the vital work they do in liaising between this House and European parliamentarians.

The Government are right to have dropped the misleading term “reset”. The UK-EU relationship will be a continual process of adjustment and adaptation. There is no end point. Even since we finished our report three months ago, there have been further significant developments, driven largely by the increasingly stark reality that we Europeans can simply no longer depend on the US as our ally.

I will not try to summarise the detail of the snapshot that we gave in our report as of last November. I want to focus on the issues that will arise in implementation of the various agreements now under negotiation, and then to range a bit more widely to consider where we go from here, especially in the light of the Prime Minister’s interesting Munich speech of 14 February.

Let me start with security and defence co-operation with the EU. This is, of course, the area where progress is most urgently needed in the face of Putin’s war in Ukraine, now entering its fifth year, and Trump’s total unpredictability. Our report welcomes the security and defence partnership which the Government concluded at the 2025 summit, but that is only an enabler. Closer consultations are useful, of course, but translating them into real improvements in military capability is much more difficult. That was all too obvious when the negotiations for the UK to participate in the €150 billion SAFE defence investment programme broke down in December. The sticking point, as noble Lords will remember, was a completely unreasonable EU demand for an entry fee running to several billion pounds. This was a remarkably short-sighted EU position, given the geopolitics, and one with which many member states were unhappy. Since then, there have been suggestions in the media that the Government plan to reopen discussions, with the aim of participating in SAFE on more reasonable terms. Can the Minister tell us whether that is the case?

Staying with our report, we also looked at the area of police and law enforcement co-operation. The key here is more automation and streamlining of data sharing between law enforcement communities. A specific example arises when the Government have to decide whether to participate in the updated version of the Prüm database, which will have facial image data as well as the existing database of fingerprints and DNA. That will be an important decision that I am sure Parliament will need to scrutinise carefully.

On the economic issues, most of our witnesses supported the Government’s manifesto commitment to negotiate agreements on sanitary and phytosanitary checks on food and animal products, and on the emissions trading system. Our witnesses were also clear that the electricity trading scheme proposals outlined in the trade and co-operation agreement simply would not work. They therefore supported the idea of exploring UK access to the EU single market for electricity trading. That is now under way, as is a negotiation.

Our report lays out the implications of agreements in these areas of UK access to the single market. In particular, they will require dynamic alignment with EU regulations as they change, subject to any exceptions that are carved out in the negotiations. This will raise important issues for Parliament. We are promised a Bill soon, which will be interesting. The SPS agreement is likely to involve a continuous process of alignment, much of it highly technical, with each change potentially having an impact on businesses across the UK. How will Parliament exercise any useful scrutiny of this constant drip of administrative change? I guess that, at the very least, the European Affairs Committee will need more staff to keep abreast of the constantly changing regulatory landscape.

Agreements with the EU will have other implications as well. In particular, the UK will have to make a financial contribution. In the case of SPS and ETS, the 2025 summit agreed that payments would go towards EU costs in running the schemes, which seems fair enough, but the Commission’s draft negotiating mandate on electricity market trading introduces the idea of “cohesion funding”—in other words, British payments to reduce disparities between EU regions. Norway makes such cohesion payments directly to projects in poorer regions. If the Minister could give us more detail on whether that would also be the UK’s approach to the inevitable demand for cohesion funding when we seek to apply for single market access in other sectors, that would be interesting.

Two aspects of the trade and co-operation agreement were set to expire in June 2026: the arrangements on fisheries, and on trade and investment in energy. The May summit agreed to roll over the existing access for EU fishermen to UK waters for 12 years, but agreed to extend the energy title only one year at a time. That fisheries deal was strongly criticised by many of our witnesses, particularly those from the fishing industry. The committee also had serious doubts about the process. Within one month of the deal being struck, it had been enacted by the Specialised Committee on Fisheries, with no opportunity for parliamentary scrutiny. I should add that the Scottish salmon industry was very pleased at the prospect of an SPS agreement, given its export-orientated business.

On the cultural front, our report welcomed the prospect of the UK associating with Erasmus+ from 2027. Agreement on that has now been reached, which is good news for young people across the UK and the EU. Negotiations are also under way for a youth experience scheme. Is the Minister confident that a deal can be struck on that in time for the next summit, planned for May?

I note that both schemes were EU, not UK, negotiating objectives. I welcome that progress is being made, but it is disappointing that there has been no progress, as far as I can tell, on the UK’s one priority in the cultural field—a deal to help touring artists. That enjoys widespread support in both Houses of Parliament and the European Parliament, given the discussions that we have had in the Parliamentary Partnership Assembly. I hope that the Minister can update us on how the Government are planning to break the logjam on touring artists.

In conclusion, I want to spend some time on the wider context for the future UK-EU relationship. My view as we went through this inquiry was that the Government’s level of ambition, even as extended at the May summit, was not nearly bold enough. Our witnesses were unanimous that, even if all the highly technical negotiations now under way were successful, the economic impact would be marginal, if positive. The Government predict a boost of around £9 billion in total by 2040, which is not much for a £3 trillion economy. The reality is, as Mark Carney put it so well in Davos, that we now live in a world where the great powers are using

“economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities”.

In that world, marginal benefits are nowhere near enough.

The Prime Minister, in his excellent Munich speech, seemed to agree. He saw closer UK-EU economic relations as part of the answer, setting the aim of “deeper economic integration” and moving

“closer to the single market in other sectors”.

If the Minister could give us any details on which sectors, that would be interesting. I welcome the aspiration to move closer to the single market, but the EU will need to respond to that. The failure of the SAFE negotiations and the restrictive rules now under discussion around its “made in Europe” initiative remind us that, for the EU institutions, the UK is still a third country. They are tending to apply their rules pretty inflexibly despite a mutual interest in working together.

The reality is that the hard strategic choices facing European nations, including Britain, will not be made in the UK-EU framework. Again, the Prime Minister recognised that in Munich. He talked of the need to step up work with like-minded allies on options for a collective approach to defence financing. He said:

“We must come together to integrate our capabilities on spending and procurement and build a joint European defence industry”.


He added that we should “turbocharge our defence production”. Again, any detail on that important new initiative would be interesting. It sounds as if the idea is to mobilise a wider group of European countries, going well beyond the EU, leap-frogging the stalemate over SAFE. There must be a question over whether there is room for two separate defence financing initiatives, but I welcome the willingness to think big in facing up to the new reality that we will have to take much more responsibility for our own security.

Trump is dismissive of international law and sees no value in allies. His treatment of Denmark over Greenland has broken all the bonds of trust which have kept NATO together for 75 years. New forms of co-operation among like-minded middle powers are therefore urgently needed to deal with a hostile Russia and an indifferent America. Such groupings tend to take shape under the pressure of great events and do not necessarily follow the blueprints set out in foreign ministries. It may be that this coalition of the willing, which has done such interesting work under UK-French leadership in supporting Ukraine, can grow into a load-bearing forum for wider strategic thinking outside NATO. For the moment, it is informal and unstructured, but it has a very interesting membership covering many European countries and Asian allies. I am sure that other noble Lords will have wisdom to bring to bear on this crucial subject.

Whatever the shape of the future, we need a turbocharging of our relationships with our closest neighbours in the EU, who share our values and interests. That will need more vision and more consistent political focus on both sides than we have had so far, but it is an objective that becomes more important every month, given the international situation that we face. I look forward to the debate and to the Minister’s comments. I beg to move.

--- Later in debate ---

[Lord Ricketts (CB)]

My Lords, I thank the Minister for such a comprehensive speech—delivered at pace, if I may say so—and I am glad that our report has stimulated such a wide-ranging and lively debate. Noble Lords will see that I am trying to be the eternal diplomat again. Many Members raised points that I did not have time to raise in my speech. I am left with the feeling that our title, Unfinished Business, was not that bad. It is unfinished in the sense that it will never be done, and in the sense that in British politics the issue of whether closer relations with the EU are in our interest is still live. That debate will continue in the months ahead, and one of the issues will be the legislation connected with dynamic alignment.

I think the big message from our debate is that the EU-UK relationship cannot be seen in a vacuum, isolated from the wider geopolitical upheaval. Indeed, it is encouraging the Government to go faster on the reset, which I welcome. I think there was widespread support in the debate for the idea that we should get closer to the EU on defence-industrial co-operation, if we can do so in a way that is in our interest, which requires the EU to think again about its entry ticket.

However, the real strategic decisions are not going to be taken in the EU, and I hope that the House will continue to discuss the issues that we touched on here. What is the right forum in the future to do that? We need to bear in mind the points made by a number of noble Lords that Britain’s leadership in a future forum for strategic decision-making in Europe depends on us having the defence resources rising at a pace to make us credible.

I personally think that a close and confident relationship with the EU is part of the response to the generational upheaval that we are facing. I am surprised that our debate did not produce a consensus on that point of view, but I think it was a valuable debate and I beg to move.

Motion agreed.