What Does the UK-EU Summit Mean for Business 

Mike Bukley, Senior Counsel
21/05/2025


The UK–EU summit on 19 May was billed as a reset—a chance to repair relations, reduce trade friction and re-establish cooperation after years of post-Brexit drift.

For business, there is progress to welcome. But many of the most significant details remain unresolved—and the economic impact, even on the Government’s own figures, is modest.

A sober response to the reset should recognise significant – and in some cases unexpectedly ambitious – wins, while acknowledging that much remains to be done, particularly for business and the economy.

Small Steps That Matter

Of the five big wins three benefit business directly, the fourth will do no harm, the fifth is a long term gain.

The clearest win for business is the new veterinary agreement, which will reduce costly and time-consuming checks on food and agricultural products moving across the Channel. UK food and drink exports to the EU have fallen by nearly a fifth since Brexit, and producers have faced major compliance costs. The easing of these barriers is expected to boost trade, reduce spoilage and lower prices for consumers.

Second, the pledge to reintegrate the UK into the EU’s internal electricity market is a major win for the energy and climate sectors. It will reduce wholesale energy prices, encourage cross-border investment in renewables—especially in the North Sea—and improve energy security. Businesses in energy-intensive sectors will hope this removes one of the hidden costs of Brexit: higher power bills and weaker investment incentives.

The other big winner was defence. The British Government gains access to the EU’s €150bn Security Action for Europe (SAFE) defence procurement fund. This will give Rachel Reeves the ability to borrow from the fund to invest in defence, boosting our ability to ramp up military capacity.

It is a big win for the British defence industry – not only will the UK Government have more money to spend, the whole EU27 and Norway, who are obligated to spend the bulk of the €150bn in participating nations, will buy from the UK as easily as they would from France or Germany.

The fourth gain is renewed British access to the Schengen Information System (SIS), a database which gives member states real-time alerts on criminal suspects, and the EU’s fingerprinting system, Eurodac. Increased UK engagement in Europol will be fast tracked. Cut crime will help business just as it will keep us all that bit safer.

Finally, a commitment to negotiate a youth mobility scheme and membership of the Erasmus+ education, training and sports scheme should enable British business to plug labour shortage gaps, and could allow cross-border companies to second younger staff or send them on training opportunities abroad.

Taken together this is a package of measures that will have a meaningful impact on the country, on business, and in particular for defence, agriculture and energy industries.

Much left to be done

The economic impact of the deal is real but does not come close to undoing the harm done by the original Brexit agreement.

The Government claims the agreement could add £9 billion to GDP by 2040—though even this optimistic projection amounts to a recovery of less than a tenth of the long-term 4% GDP hit caused by Brexit, as estimated by the Office for Budget Responsibility.

And while a few sectors did very well, most got nothing at all. There was no movement on services, which account for 80% of the UK economy and over half of exports. There’s still no deal on the mutual recognition of professional qualifications, no framework for the mobility of workers or service providers, and no certainty for UK firms in financial services, law, creative industries or tech.

The same political red lines remain: no return to the single market, no customs union, and no freedom of movement. As long as those constraints stand, the scope for a transformative trade deal is limited.

The result is a patchwork reset—welcome progress, but not a strategy for long-term economic revival.

What happens next?

In short – Switzerland. The Swiss famously refuse to join the EU but live in perpetual negotiation with them over everything from mobility to trade, environmental regulations and security.

The UK and EU have committed to annual summits, which brings the likelihood that every year will see a little more chipping away at the basic Brexit deal and its harms.

That is good news – the more progress the better, particularly if it helps more sectors, promotes jobs, allows more business collaboration or enables faster progress towards net zero or rearmament.

But it also means no quick fix. Incremental change will only get us so far – particularly if British red lines stay as they are. There are hard limits to what can be achieved as a non-EU member, short of the kind of quasi-membership unlikely to be politically achievable.

Like Switzerland, Britain may find itself locked in permanent negotiation with a larger neighbour whose rules it must navigate, but cannot shape.

The EU, for its part, is wary of overcommitting. The spectre of a future UK Government reversing course—as threatened by Reform UK and some Conservative figures—looms large. Meanwhile, Labour’s own caution, especially on migration, limits what’s achievable.

Time to talk

If there’s a lesson for business it is this: it is worth making the case for change in Brussels and London. The energy and agriculture sectors won at least in part because they consistently made their case with EU and UK leaders. Defence did the same, and was further helped by the obvious need for Europe to rearm at speed.

They were helped by the fact that both sides stand to gain from higher exports, lower bills, lower food costs and greater military capacity. But without business pressure the deals may not have been done, or not done so fast or so well.

There are similar arguments to make in almost every sector, for both goods and services. All are held back by restrictions on movement and investment, plus the permanent disadvantage that comes from the fact that for European firms it is often just easier to buy from an EU supplier than a British one.

The reset was undoubtedly incomplete – given the events of the last decade it was always going to be. But we are now at least undoing harms instead of creating new ones. That should encourage us to push for more.