Ministers told to “get off the fence” on Britain’s EU future

Ministers must “get off the fence” and set out where they want Britain’s relationship with the European Union to sit by the end of this Parliament, the Business and Trade Committee has said.

The cross-party committee published its findings on 22 June 2026, the eve of the tenth anniversary of the Brexit referendum, concluding that the Government’s “reset” of relations with Brussels has so far delivered limited meaningful impact.

The reset was launched on 19 May 2025 at a leaders’ summit at Lancaster House, which agreed a Common Understanding, a Security and Defence Partnership, and sectoral agreements on steel, fisheries and energy.

Thirteen months on, the committee found that an initial stakeholder welcome for the approach had given way to concern about the pace of delivery.

Liam Byrne, Chair of the Committee, said ministers had been frank about the economic damage caused by Brexit but that a gap had opened between their rhetoric and what the reset was delivering.

“Business cannot invest in political signalling alone. It needs clear rules, a clear destination and a credible vision,” Byrne said.

He said ministers must set out where they want Britain’s relationship with Europe to be by the end of this Parliament and provide a roadmap to restore confidence, strengthen security and deliver growth.

Reset to add 0.5% to GDP by 2040

The committee said delivery of the reset measures, even in an optimistic scenario, would add just 0.5% to UK GDP by 2040.

The Office for Budget Responsibility estimates that leaving the EU has reduced UK GDP by around 4% over the long term.

Negotiations on a Sanitary and Phytosanitary agreement and on linking the UK and EU Emissions Trading Schemes are due for completion in 2026 and expected to be operational by mid-2027, though the committee heard their benefits may not be felt for some time.

Only one of the six core Common Understanding commitments has been agreed: the UK’s association to the Erasmus+ student exchange programme, at a cost of £570 million for the 2027/2028 academic year.

Four remain in progress and one has failed. None of the three wider UK ambitions, covering help for touring artists, improved business mobility and the mutual recognition of professional qualifications, has been materially advanced.

Defence talks collapse over participation fee

The committee said failure to secure UK participation in the EU’s Security Action for Europe defence procurement scheme was a disappointing outcome.

Talks collapsed in November 2025, with the EU reportedly seeking a one-off participation fee of up to €6.5 billion against the UK’s proposed €300 million.

The committee agreed that, if reported correctly, the cost was too high and backed the Government’s decision not to participate at this stage, while recommending it reopen negotiations on future rounds.

Byrne said it was especially disappointing that the UK had yet to secure participation given Russia’s continuing war against Ukraine, escalating hybrid attacks and the clear message from the United States that European NATO allies must do more for their own security.

Five concerns and a stalled energy deal

The committee set out five concerns about the government’s approach:

• A “rhetoric-reality gap” on the economic returns of the reset, limited progress on defence and defence industrial policy
• Delayed negotiations on electricity trading while the UK battles the highest electricity prices in the G7
• A lack of strategy beyond the 2026 summit
• Continued disagreement over “dynamic alignment” with EU regulations.

Of the 21 recommendations the committee made in 2025, four have been completed, 11 are in progress and on six there has been no progress.

The committee said the 2026 leaders’ summit should act as a critical moment for both sides to increase ambition and pace.

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