Rachel Reeves 'absolutely happy' to look at joining EU customs group

The chancellor has said the government is "absolutely happy" to look at joining a pan-European customs area after the EU said it is open to British membership.

Earlier this week, EU trade commissioner Maros Sefcovic said Brussels "could consider" allowing the UK into the Pan Euro Mediterranean Convention (PEM) as part of a "reset" in discussions between the UK and the EU.

Chancellor Rachel Reeves told Sky News' Sunday Morning with Trevor Phillips: "It was really interesting to see Maros Sefcovic this week suggest that the UK might be welcome in that Pan Euro Mediterranean customs framework.

"We are absolutely happy to look at those different proposals because we know the deal the previous government secured is not working well enough, not for small businesses trying to export, it's not working well enough for large businesses either.

"We're grown up enough to admit that, whereas the previous government said there were no problems at all."

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She said they would look at "constructive ideas" but only if they adhere to the government's red lines set out in the manifesto.

Shadow foreign secretary and leading Brexiteer Dame Priti Patel accused Labour of trying to rejoin the EU "through the back door".

In reaction to Ms Reeves' comments, she posted on X: "Labour are unpicking Brexit and will do anything to drag Britain back into the EU through the back door."

Ms Reeves' stance differs from that of EU relations minister Nick Thomas-Symonds who earlier in the week said: "We don't currently have any plans to join PEM."

However, Sir Keir Starmer's spokesman and Business Secretary Jonathan Reynolds did not rule out future membership and said their red lines were that "we will never join a single market, freedom of movement".

The PEM was launched in 2012 and aims to make it easier for 25 countries, mostly in Europe and north Africa, to trade with each other through common rules by signing free trade agreements to reduce or lift tariffs on each other's goods.

Conservative shadow business secretary Andrew Griffith said joining the PEM "is not the silver bullet to growth the government thinks it is".

"Whenever Labour negotiates, Britain loses. So, we need to make sure they don't surrender important assets like our fishing rights," he added.

"We must avoid undoing Brexit by the back door by aligning with the EU's low growth model."

Non-doms tax change

Ms Reeves said she is "determined to be the chancellor that brings back growth to the UK economy".

She also defended tweaking her October budget this week to allow non-doms more time to bring in money to the UK from overseas on a reduced tax basis after an exodus of millionaires from the UK.

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She made the announcement at the World Economic Forum in Davos and said she had listened to the concerns raised by the "non-dom community".

The chancellor defended the move to Trevor Phillips, saying it is "not costing taxpayers a single penny".

She added: "We're getting rid of the concept of non-domicile in the tax system, so that if you make Britain your home, you pay your taxes here.

"But we also want to be a welcoming place."

Ms Reeves also argued changing the rules for non-doms was different to introducing inheritance tax for farmers as she said that will only affect a small number of farms.

Farmers have said the government's analysis of how many farms will be affected is incorrect, but Ms Reeves stood by her statement.

(c) Sky News 2025: Rachel Reeves 'absolutely happy' to look at joining EU customs group