Three reasons why the UK could be getting closer to EU neighbours

Words by ITV News Producer, Kieran Carter

The European Council has formally approved the UK’s participation in the Erasmus+ scheme for 2027 and opened the door to begin negotiations on closer alignment between the two trading partners.

The government claims the scheme, which was announced in December, could see as many as 100,000 people in the UK benefit from opportunities around education, training, youth, culture and sport.

The move to integrate with the EU internal electricity market is hoped to increase energy security for both blocs at a time when was in both Ukraine and the Middle East has caused chaos and uncertainty in the global energy market.

The commitment, along with integration into the EU’s electricity market, comes at a time when Labour have begun signalling it favours closer UK-EU ties.

In her Mais lecture earlier this month, Chancellor Rachel Reeves said the UK “should absolutely align” with Brussels, describing the EU as the “biggest prize” for boosting Britain’s stagnant growth.

Influential Labour Mayor of London Sadiq Khan went further, calling for a full rejoining.

Calls from Labour for closer alignment are nevertheless in keeping with the government’s call for a Brexit reset, aiming to stabilise and expand ties with the EU.

So what’s first on the reset agenda?

Erasmus+

Announced in December, and formally approved on Monday, the UK is set to rejoin the Erasmus+ scheme from 2027.

Typically seen as student exchange programmes, the scheme encompasses far broader parameters, funding these as well as university staff and youth workers doing teaching or training placements, apprentices doing work placements abroad, and young people doing voluntary service.

The EU distributes funds to participating partners and participants typically recieve a stipend to cover living expenses abroad.

The UK’s participation comes with a £570 million yearly price tag, a figure which the government said in December included a negotiated 30% discount.

Cyprus’ Deputy Minister for European Affairs, Marilena Raouna, described strengthening UK-EU relations as a “key priority” of her country’s EU presidency.

“Today’s decisions mark tangible progress in delivering on the outcomes of the first EU–UK Summit held in May last year,” she said.

“By promoting learning mobility via Erasmus+, we are advancing shared interests and reinforcing people-to-people ties, especially for our youth.”

Officials hope joining the EU’s electricity market would let UK consumer’s access cheaper electricity when available from the continent. Credit: iStock / James Marty

Electricity markets

On Monday, the European Council also agreed to kickstart negotiations on the UK joining the EU’s internal electricity market, a move both parties insist will reduce unnecessary friction and lower energy bills.

Trade body Energy UK estimated in 2024, that this post-Brexit friction added up to £370 million a year to the price of purchasing energy from Europe.

This is partly due to the different costs both trading partners attach to carbon emissions, creating tariffs between the two on account of the disparity.

The market works by allowing the free movement of electricity from where it is generated in surplus to where there is increased demand, essentially allowing certain areas to benefit from cheaper prices being offered by EU countries within the internal market.

The current conflict in the Middle East and the effective closure of the Strait of Hormuz have highlighted vulnerabilities in various countries’ energy supplies.

Were the UK to join the EU internal electricity market, the government hopes it would better protect supplies from short-term shocks.

The European Council claimed any such agreement would lead to “dynamic alignment of UK laws to EU rules”, creating a “level playing field between the parties.”

It added: “Allowing the UK to participate in the EU’s internal electricity market would improve the efficiency of the electricity trading between the parties, and facilitate investments in electricity infrastructure, including renewable electricity generation that is necessary to achieve both sides’ net zero ambitions while safeguarding the level playing field between the EU and the UK.”

Rachel Reeves set out her arguments for closer alignment with the EU in her Mais lecture earlier this month. Credit: PA

The cost of cohesion

Participation in the EU’s internal electricity market would however, come with a cost.

Negotiations on how much the UK would contribute to integrate with the EU market were also greenlit on Monday, with the EU signalling it would seek to establish a “permanent mechanism” for the UK to make an “appropriate financial contribution” to the EU’s cohesion policy.

The cohesion policy sees wealthier areas of the EU contribute so poorer regions can benefit from investment, with the underlying theory being that a more economically balanced EU is a more stable and politically sustainable one.

The European Council said on Monday any participation from the UK in energy markets would be contingent on this financial agreement being reached simultaneously.

It said: “The agreement on the UK’s financial contribution towards reducing disparities between the EU regions by increasing the bloc’s economic, social and territorial cohesion is part of a consistent EU policy that couples the granting of market access to a third country with a fair financial contribution reflecting the benefits derived from such access.”

Adding: “The financial contribution of the UK should appropriately reflect the relative size of the UK’s economy and the proportion of the internal market in which the UK aims to participate in line with consistent EU policy.”

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Closer alignment or rejoining by the “backdoor”?

Previous years have seen Labour shy away from calling for closer EU alignment over fears of reigniting Brexit battles and attacks claiming it was trying to rejoin the EU.

Responding to Monday’s announcement, Shadow Cabinet Office Minister Mike Wood said: “This deal goes far beyond rejoining schemes like Erasmus.”

He added: “The UK is now being subjected to pay into funding EU infrastructure, regeneration and cross-border projects across Europe that bring no direct benefit to the British public.

“Keir Starmer appears ready to sign up to substantial payments to Brussels without securing meaningful returns – raising serious questions about value for money for hardworking British taxpayers.

“Taken together, this looks less like pragmatism and more like a backdoor way into rejoining the EU. Whilst Labour are looking to reignite this decade old debate, the Conservatives, under new leadership, have a plan to take Britain forward.”

Following today’s approval, the EU Commission will now open negotiations with the UK on the two agreements in question.

Once negotiations are finalised, the agreements will have to be endorsed by the Council before they can enter into force.

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