Five years on from Brexit: Is Britain finally ready for a ‘New Deal’ with Europe

Raman Gill, Intern
04/02/2025

January 31st marked the fifth anniversary of Britain’s exit from the European Union, the full terms - still to be completely decided, the impact – yet to be fully understood, and the fallout – continuing to rewrite the political landscape. Despite half a decade passing, this historical departure continues to play a key role in British party politics and shape its relationship with the world.

The current Labour government has made no secret of desiring a “reset” of relations with the EU, blaming the previous Conservative government for the reputational damage to the UK, as they vow to build a new era of UK-European relations. This ‘reset’ is one pillar of the government’s central ‘growth’ mission, with Prime Minister Sir Kier Starmer believing more cordial relations can lead to quick mutually beneficial agreements and an uptick in growth. 

In an effort to kickstart Britain’s new relationship with Europe, the Prime Minister is in Brussels this week to join a meeting of EU leaders at dinner – the first by a Prime Minister since the 31st January 2020. Though nominally, the topic of the conversation is a new defence and security arrangement aimed at supporting Ukraine against Russian aggression, wider conversations on the economy and wider trading arrangements will likely be just as present. 

With both sides feeling threatened by President Trump’s trade war, it has never seemed more beneficial for the two sides to align themselves closer and find safety ‘in numbers’. Potentially, this threat could open the door to closer relationship agreements that ease trade frictions and rebuild cooperation, with reports that Britain is considering agreeing to a youth mobility scheme or joining the Pan-Euro-Mediterranean Convention.

However, the priorities of the two sides still widely differ. For Starmer, the focus is on signing an agreement that supports Britain’s service sector, enabling them to operate more easily in the EU, generating the largest boost to the UK economy. On the other side of the Channel, President Macron of France has consistently commented that an agreement of this kind would be impossible without a reciprocity fishing agreement. With both arrangements as politically difficult for either side, it is here where the deadlock begins. 

Beyond political impasses, Britain is beginning to realise the potential of long-touted post-Brexit ‘freedoms.’ Its newfound independence over regulatory landscapes and policy direction has allowed the nation to maintain competitive business measures, such as the postponement of the Basel III framework. Additionally, whilst both sides are at threat, ensuring regulatory and policy separation from the EU, the UK might be able to avoid the almost certain impending barrage of tariffs expected to be imposed on the European Union.  

Equally throwing a spanner in the works for Starmer’s ‘reset’ is the growing domestic popularity of Reform and the Liberal Democrats. From opposing sides, both are using Britain’s future relationship with the EU as a position from which to mount attacks on the Labour government.  

Liberal Democrat leader Sir Ed Davey has made clear that the UK must “step up and lead with our neighbours in Europe” against the looming economic threats of the Trump administration.

Meanwhile, Nigel Farage needs no excuse to attack the Starmer’s record on Brexit. Any hint of increased immigration from a youth mobility scheme or European fishermen in British territorial waters can be expected to be quickly criticised by the Reform leader. 

Nevertheless, according to a recent YouGov poll, 55% of Britons now say it was wrong for the UK to leave the EU, with just 11% seeing Brexit as more of a success than a failure. It is exactly this sentiment which may encourage Starmer to go bold whilst still early in the Parliamentary session, forging a new trading relationship that will lead to higher economic growth by the time of the next election in 2029.

The political hurdles to overcome are high. It is almost certain that this first meeting of European leaders will not immediately lead to a new chapter in the UK-EU relationship as once mooted. Nevertheless, on a continent under threat economically by Trump’s tariffs and physically by Putin’s Russia, the necessity for a warmer relationship is clear. It is potentially now, five years on, that the next chapter begins.