TCA review
Alongside the reset, the first five-year review of the implementation and operation of the TCA takes place in 2026. It is not a renegotiation but may lead to some improvements.
Both the UK and the EU have published reports on the implementation of the TCA. The latest UK report covers April 2023 to December 2024, and the EU’s latest report covers 2024.
There is also ongoing review where the TCA allows it. For example, lower profile discussions take place in the various TCA committees. These include areas that are part of the Labour reset such as fish, energy cooperation, and UK involvement in Erasmus +.
UK-EU reset
The Labour government has made significant progress in repairing the relationship between the UK and the EU. On 19 May 2025, the UK Government and the EU held their first annual joint summit since the UK left the EU. Interestingly, the TCA had not envisaged such an annual summit.
Before the summit, the UK and the EU reached political agreement on energy cooperation and extending reciprocal access to fishing waters. Agreement followed discussions within the TCA committees which had prepared the ground.
Three documents set out the outcomes of the summit:
- UK-EU Joint Statement which sets out a new Strategic Partnership between the UK and EU.
- Security and Defence Partnership between the EU and the United Kingdom, adopted as a non-binding political framework of cooperation.
- “Common Understanding” setting out a renewed agenda for strengthened bilateral cooperation across a range of policy areas.
Among the commitments in the Common Understanding is a proposed new agreement to establish:
- a common SPS area (covering food and agricultural standards);
- an agreement on linking the UK and EU emission trading schemes (ETS);
- a possible agreement on UK participation in the EU’s internal electricity market;
- a UK-EU youth experience agreement.
The UK and EU also agreed to work towards UK association with Erasmus+. This was achieved and announced in December 2025 (see section on higher education). Previously, under the Sunak government, the UK had rejoined Horizon Europe as an associate member (see section on science).
Status of the reset
The fisheries agreement was reached through a decision of the TCA Specialised Committee on Fisheries on 19 June 2025. It extends for 12 years, ‘the level and conditions of access granted by each Party to vessels of the other Party to fish in its waters’ to 30 June 2038.
On energy cooperation, the TCA provisions were due to expire on 19 June 2025. Both sides agreed to extend them to March 2027 by a decision of the UK-EU Partnership Council, and, thereafter, to renew the extension annually.
Talks on an SPS agreement and the ETS are in progress, with informal reports that the aim is to implement agreements by mid-2027.
The first step in resetting areas is for the EU and the UK to give their teams negotiating objectives (similar to the process for the Brexit negotiations). The European Council adopted decisions authorising the Commission to undertake negotiations for:
- a youth experience agreement on 20 June 2025;
- participation of UK companies in SAFE on 18 September 2025;
- ETS and SPS agreements on 13 November 2025.
From the UK side, it was a different story. In March 2026, the Foreign Affairs Committee reported damningly that UK-EU reset lacks “direction, definition and drive”. It found that the Government’s reset lacks clear strategic priorities, resulting in the EU seeming to have achieved more concrete progress towards their demands than the UK. “It feels as though we are on a journey with no clear destination.”
The report calls for a White Paper with a coherent vision for the future of the UK-EU relationship, and for a new Commons EU scrutiny committee.
As part of the new security and defence partnership, the UK and EU explored cooperation under Security Action for Europe (SAFE). This is the EU’s preferential defence funding initiative of €150 billion. This would enable the UK to take part in procurement bids alongside EU member states. However, despite the strategic importance of defence to both parties, the initial negotiations over UK participation failed. Nonetheless, a future deal may be reached.
The next annual joint summit is expected in the summer of 2026, but a date has not been set.
Labour’s reset in economic context
The government estimates that the impact of the SPS agreement and cooperation on energy will boost UK GDP by about 0.3% by 2040 (£9 billion in today’s prices). Despite the effort work going into negotiations, the economic benefits are trivial in the context of the costs of Brexit (see Figure 16.5 and the section on Brexit impact).
There would also be a benefit from a youth mobility scheme which has been estimated at 0.14% to 0.29% of GDP (source – Centre for European Reform). Including this, the benefit of the reset would be 0.4% to 0.6% of GDP.
The cost of leaving the EU Customs Union, can be estimated by looking at the economic harm of the EEA or ’Norway’ option. Norway is not in the EU Customs Union but is in the Single Market (see section on UK-EU trade options).
If the UK had Brexited with the EEA option, the Department for Exiting the European Union (DExEU) assessed the economic impact would have cost 1.4% of GDP (1.5% offset by trade deals with a benefit of 0.1% of GDP). On these figures, one could estimate that benefits of joining a UK-EU customs union at about 1.5% (less any benefit of UK trade deals over EU trade deals). For more on the range of estimates, see section on Brexit impact.
By contrast, government figures put the benefits of post-Brexit trade deals and Labour’s reset at 0.61% of GDP. The trade deal benefits are a long way short of the benefits of joining a customs union. It is also possible that the terms of rejoining might compensate the UK for any net benefits that are lost.
A much bigger economic prize would be to rejoin the Single Market at 3.5% of GDP (DExEU central estimates). The 2018 DExEU figures indicate that single-market membership would be worth about two and half times the value of customs-union membership.
Understandably, voter opinions have also become clearer. A majority of public opinion favours rejoining the EU (see section on Opinions of Brexit). However, the political challenges of rejoining still seem significant.
Nevertheless, the recent dramatic falls in immigration probably mean that ‘freedom of movement’ is not the poisoned chalice that it once was (see section on immigration).
Figure 16.5: Labour reset and trade deals in context
Sources:
Foreign Affairs Committee, From a Common Understanding to Common Ground: Building a UK-EU Strategic Partnership fit for the future, March 2026
Chatham House, The UK will not join the EU’s new defence fund. Can the UK–EU security reset still succeed?, December 2025
UK in a Changing Europe, The UK-EU reset six months after the summit: Where are we?, December 2025
Economic Observatory, What are the economic implications of the UK-EU reset deal?, 24 June 2025
Centre for European Reform, Benefits of UK-EU reset, March 2026
Blueprint of recommendations
For those looking for incremental change rather than bold strategic moves, there’s a blueprint: “Trading our way to prosperity: A blueprint for policymakers”, published in May 2023 by the UK Trade and Business Commission (UKTBC).
The UKTBC, established in 2021, had been working to understand how the UK’s new trading relationships are impacting businesses and different sectors of the UK economy. Andrew Lewin MP chairs the Commission, which has an impressive membership. At the time of developing the Blueprint, the Rt Hon Hilary Benn MP and Peter Norris led the UKTBC
The Blueprint details 114 actionable recommendations designed to enhance the UK’s trading relationships with the EU and other countries. These are the result of extensive research and evidence gathering. Much of this material is available on their website.
However, it’s important to remember that, from the EU’s perspective, ‘making Brexit work’ is a threat because it might encourage other member states to consider leaving.
Sources:
UK Trade and Business Commission, “Trading our way to prosperity: A blueprint for policymakers”, May 2023