Britain could rejoin Brussels’ Net Zero climate scheme as part of Sir Keir Starmer’s moves to ‘reset’ Brexit, diplomatic sources have said.
As the Prime Minister prepares to become the first British leader since Brexit to attend a meeting of the European Council’s 27 EU leaders tomorrow, sources said the UK was in discussions to re-enter the EU Emissions Trading System (EU ETS), which sets a cap on the amount of greenhouse gases that can be emitted by certain industries.
UK officials in the Cabinet Office dubbed ‘The Surrender Unit’ are also discussing entering the Euro-Mediterranean Free Trade Area, in what Chancellor Rachel Reeves hopes will stimulate the sluggish economy.
As part of the talks, Brussels is demanding that Britain partially reintroduces freedom of movement by allowing 18 to 30-year-olds from the EU to move to the UK for a few years, paying the same university fees as British students.
However, some No 10 strategists, led by Chief of Staff Morgan McSweeney, fear the symbolic move to unwind Brexit will present a political ‘gift’ to Labour’s opponents in the Conservatives and Reform.
Sir Keir failed to mark Brexit’s fifth anniversary on Friday, and today will host German Chancellor Olaf Scholz for talks at Chequers.
Tory leader Kemi Badenoch on Saturday night said she was setting Sir Keir ‘five tests to protect Brexit’: No backsliding on free movement or compulsory asylum transfers; no new money paid to the EU; no reduction in our fishing rights; no rule taking, dynamic alignment or European Court jurisdiction and no compromise on the primacy of Nato as the cornerstone of European security.
Discussions to re-enter the EU ETS, a cornerstone of EU climate policy which the UK left in the wake of the historic vote to quit the EU, come amid a Cabinet rift over Ms Reeves’ backing for a third runway at Heathrow, which Energy Secretary Ed Miliband once threatened to resign over. He has been conspicuously quiet since the announcement.
Labour’s opponents are likely to criticise any move which could allow Brussels to set Green levies for British companies as part of the Net Zero target.
The Euro-Mediterranean Free Trade Area is focused on so-called ‘rules of origin’ for products, but critics say that it could have a ‘cascade effect’ by becoming a form of customs union, which would complicate efforts to strike a trade deal with President Trump.
Ms Badenoch said: ‘Five years ago, the Conservatives broke the deadlock and got Brexit done… Keir Starmer and his Labour party opposed us every step of the way.
‘Now they are trying to reopen the divisions of the past and edge us back into the EU. So I’m setting Keir Starmer five tests to make sure he doesn’t undo Brexit.
‘These tests will ensure we seize the opportunities of the future and use our independence to grow the British economy. Under my leadership, the Conservatives will always stand up for Britain and fight for our hard-won freedoms.’