Back to Lancaster House
The UK-EU "reset" takes shape, but the post-Brexit foundations remain intact
Eight years ago, Theresa May, stood in a grand room at Lancaster House to deliver one of the most consequential speeches of her premiership. Britain, she declared, would leave the EU single market, the customs union, and the free movement of people. Hers were the red lines that set the parameters of the Brexit talks and ultimately shaped the terms of the UK’s settlement with the EU.
This week, Keir Starmer returned to the same room with a different message. Standing alongside the presidents of the European Commission and the Council, the prime minister hailed “a new chapter” in post-Brexit relations. His was a message of partnership and pragmatism. But how much have the fundamentals changed since his predecessor set the contours of Brexit?
At the core of this week’s “reset” deal were two documents: one was a ‘security and defence partnership’ and the other was a ‘common understanding’, where the two sides outlined a shared agenda that they will advance in the months – and likely years – ahead. These are not legally binding texts, but rather a political roadmap that captures the outcome of recent ‘exploratory talks’ and sets the stage for future negotiations.
It would be easy to dismiss the package as insubstantial – a set of soft-law commitments without legal force. But after years of mutual distrust following Brexit, establishing a basic framework of shared priorities was a necessary first step. These two documents set the agenda for the next three years. What they omit is unlikely to reappear any time soon.
The most substantive element is the security and defence partnership. This is not a bespoke “security pact” that Labour promised during the election campaign. Instead, it follows a familiar EU template already rolled out to countries like Japan, South Korea, and Norway, over the past year. (Roughly half the language in the UK version is identical to Japan’s SDP.) From the EU’s perspective, the UK is just another third-country partner with such agreement.
Nonetheless, the ‘SDP’, as is commonly known around Brussels, opens the door to British participation in initiatives like military mobility projects or EU Common Security and Defence Policy (CSDP) missions. More significantly, it provides a pathway for UK firms (or their EU subsidiaries) to access to EU defence funds under the bloc’s emerging defence mechanism. A March White Paper from the Commission made clear that such a partnership agreement was a prerequisite for third-country involvement in future EU defence initiatives. The UK, from the EU’s perspective, now joins a broader coalition of “like-minded allies”.
What this agreement does not do is offer immediate or privileged access for the British defence industry. Despite references in press statements to the EU’s SAFE fund, the text of the SDP itself contains only a cautious formulation: a commitment to “explore possible mutual involvement in respective defence initiatives in accordance with the respective legal frameworks” (para 25). In other words, everything now hinges on follow-on negotiations and, crucially, political will.
On the economic front, two elements stand out.
The first is a commitment to negotiate a sanitary/phytosanitary (SPS) agreement. There are sound reasons why this has become a priority. The costs of being outside the EU single market have been most acutely felt in agrifood trade – businesses face extensive paperwork to move food products across the Channel, and many have stopped trading altogether. And, at the macro level, the impact on trade in food products has been significant. By the end of 2024, UK exports of food products to the EU remained more than 13% below their pre-pandemic levels – compared to non-EU exports that were 5% down. Imports, too, were hit sharply in the aftermath of Brexit but have since rebounded to their pre-pandemic levels.
The good news is that the ‘common understanding’ offers relatively specific parameters for the shape of the eventual agreement. In the lexicon of policy wonks, the UK is heading towards a ‘Swiss-style’ SPS deal, not a ‘New Zealand-style’ one – that is one based on ongoing alignment with the EU’s SPS regulations. Its scope appears broader than many expected, covering the bulk of EU agrifood rules. If negotiated, it could eliminate most checks and paperwork for food products crossing from Great Britain to the EU. That matters not only for GB-EU trade, but also for GB-Northern Ireland flows, as it could mitigate the risk of new internal barriers arising under the Windsor Framework. As with other elements of this package, however, negotiations are still to come.
The second element is an agreement to explore UK participation in the EU’s internal electricity market and alignment of carbon pricing through linked emissions trading systems. Both reflect long-standing issues in the post-Brexit relationship. Electricity trading was left unresolved in the Trade and Cooperation Agreement (TCA) negotiation, while divergence in carbon prices has triggered concerns over energy price competitiveness and potential tariffs on carbon-intensive goods, such as aluminium or steel, under the EU’s carbon-border adjustment mechanism (CBAM). Linking ETSs would allow the UK to avoid these CBAM-related tariffs by maintaining alignment in carbon pricing. These are tangible potential gains, but they require substantial technical work.
Two further aspects stand out on the economic front. One is a proposed youth mobility scheme — now rebranded as a “youth experience” initiative by a clever official somewhere in Whitehall who probably reads post-structuralist French thinkers and believes that avoiding the term “mobility” will make this scheme more palatable to the British public. Details are sparse, which reflects the the lack of agreement in initial discussions. But something is likely to emerge eventually. Perhaps more significantly, the UK has pledged to rejoin Erasmus+. That matters to students, and symbolically, it reverses one of the Johnson government’s more ideologically driven exits.
Less noticed, but potentially consequential improvements have been agreed in the area of justice and law enforcement cooperation. Improved data-sharing and operational arrangements between UK and EU law enforcement agencies may not grab headlines, but they could prove among the most meaningful in practice.
Taken together, these measures represent a step forward, but two caveats are in order.
First, this package largely clears the lowest-hanging fruit after years of post-Brexit frostiness. While there are some forward-looking elements, many of the politically difficult questions remain untouched. There is, for example, no commitment on mutual recognition of conformity assessment for industrial goods (a key UK ask). Nor was there anything meaningful progress made on services, broader mobility, or economic security and supply chain coordination. These are important gaps, particularly as the global trade landscape shifts.
Second, and at the risk of repeating this point, all these areas outlined here remain subject to actual negotiations, with the inevitable further bargaining and trade-offs. And important questions remain: How soon will talks begin? Will the European Commission require a negotiating mandate from member states? Will progress be contingent on political bandwidth devoted to this process?
As is the case with any negotiation, it is reasonable to ask where compromises were made.
The EU has signalled a willingness to offer selective participation to the single market, particularly on food products, energy, and potentially, on defence industrial policy. This isn’t unprecedented; the EU’s recent agreement with Switzerland provides similar partial access in exchange for dynamic regulatory alignment, ECJ-linked dispute resolution, and financial contributions. The UK deal seems to be heading in a similar direction, even though Commission officials are likely to resist any comparisons and argue that “each relationship is unique”.
The UK government, meanwhile, has softened its stance on an important principle: that it is prepared to align to EU regulations when doing so is in its clear economic interest, for example to reduce import prices of food products or energy. This marks a shift that shouldn’t be understated: previous Conservative administrations were unwilling to countenance such a departure from what they saw as fundamental tenets of Brexit.
The political price for securing this deal included a concession to France on fisheries. Despite the outcry from opposition benches in Westminster, this arrangements merely extends the status quo, originally agreed by Boris Johnson, for another 12 years. This may not satisfy a mercantilist mindset, but the alternative – annual negotiations over fishing licences – was something that everyone involved on the UK as well as the EU side was eager to avoid.
UK negotiators have also secured several important concessions from the Commission: ECJ jurisdiction will be kept at arm’s length, with disputes handled through independent arbitration. There will also be new ‘decision-shaping’ mechanisms – similar to those Norway has – will give the UK government input on draft EU laws in areas where it aligns.
These concessions aren’t entirely unique to the UK (the Swiss deal offers comparable arrangements). But in the British context, they are significant. Former Conservative government ministers have been quick to denounce this deal as a “great British sell-off”. In reality, parts of this package are more sovereignty-enhancing to a greater extent than anything negotiated by the previous Conservative administrations. Both the Northern Ireland Protocol, and the Windsor Framework that partially replaced it, accepted the premise of direct ECJ jurisdiction for EU laws applied in Northern Ireland. From a sovereignty perspective, Starmer’s deal improves on that. Neither Johnson, Truss, nor Sunak came close to this.
So far, all that the UK and the European Commission have agreed is a political declaration. Concrete progress will depend on how the next phase unfolds.
The two sides have said surprisingly little about that process. When will future negotiations begin? How will they be structured? Will issues be addressed individually or bundled into a broader package? Will progress in one part depend on movement in another? Will new agreements be folded into the existing TCA structure, or take the form of standalone ‘mini-deals’? When will domestic legislation be required on the UK side, and how will it be implemented? There are important issues, but they remain unanswered.
As for the timeframe, the EU’s recent experience with Switzerland may offer a reference point. After signing a ‘common understanding’ in December 2023, it took the two sides about a year to reach an agreement, with all issues agreed as part of a single package. The UK’s situation isn’t identical, of course. Incremental announcements on individual files appear more likely, particularly in areas where the parameters are already well-defined (such as the SPS deal) or time-sensitive (linkage of emission trading systems, with the EU CBAM coming into full force next year). A 12-month horizon may be a reasonable guide for tangible progress. Annual UK-EU summits give will create a pressure point to ensure there is “something” to announce at the lectern.
A further issue, likely to surface in due course, is whether parts of the Windsor Framework, which specifically covers trade between Northern Ireland and the EU, will need to be reopened or amended to maintain consistency with any future UK-EU SPS agreement. That now seems probable, though I suspect officials on both sides are likely to defer that point of conversation for now. Northern Irish legislators will, however, take a close interest as they continue to monitor new EU SPS rules that apply in Northern Ireland.
Putting aside the individual improvements agreed this week, the bigger picture is unchanged. The structural parameters of the post-Brexit model – with the UK outside the single market and customs union – are still firmly intact. In that way, the framework laid out by Theresa May at Lancaster House is just as relevant today as it was that cold winter morning in January 2017. The tone has clearly changed, but the fundamentals endure until today.
What this week has revealed is a glimpse into the new post-Brexit reality: one of continuous negotiation with the EU. Switzerland offers a telling parallel. Since rejecting EU membership in 1992, it has spent over three decades negotiating, and then renegotiating, its arrangements with Brussels, moving in and out of agreement. The UK now enters a similar phase: a cycle of structured but perpetual negotiations, where unresolved legacy issues require patching and new challenges will inevitably arise.
Yet Britain’s political and media culture, which continues to sensationalise almost every Europe-related story, appears woefully ill-prepared for this new era. Even modest, sensible improvements are framed as a “betrayal of Brexit”, while basic facts, repeated ad nauseam over the past decade, are still routinely misunderstood by politicians and journalists alike.
Whether this post-Brexit equilibrium proves sustainable – and for how long – is a much larger question. But not one for today.