UK’s closer ties with EU are a problem

Britain pursuing closer ties with the European Union will “not be viewed favourably” in the White House if it in any way affects the trading relationship between the UK and US, Washington’s ambassador to the UK has warned.

Warren Stephens said that the government’s recent decision to adopt over 70 European rules onto the UK statute book was likely to “be a problem” in Washington if it threatens the recently struck deal with the US.

“The relationship between the US and the EU is… a lot more difficult than the UK,” the diplomat said at a British Chambers of Commerce conference in London. “To the extent, and saw this week that the British government is going to put 76 laws or rules back on the books, to the extent that affects US trade and requirements, that’s going to be a problem.”

The Prime Minister and Chancellor have held up a tighter trading relationship with the EU as a key lever as their bid to revive Britain’s anaemic economic growth.

Rachel Reeves has become increasingly agitated about economic costs of Brexit which she believes are a core factor behind Britain’s stuttering economic prospects. Last week she used speech to call for closer realignment with the European Union.

As part of those efforts, ministers are also poised to push forward plans to re-introduce onto the statute book a swathe of European directives on areas like agriculture and food standards.

The government has so far resisted pressure to pursue a move to rejoin the European customs union, which would threaten to undermine elements of the the agreements with the US and India. But Stephens warned that even the latest, smaller step towards realignment risked another diplomatic rift if it forced officials to revisit any of the two countries’ recently struck trade agreement.

“I know the EU is an important market for the UK, and you’ve got to do what’s best for you, but that [an encroachment on UK-US trade relationship] will not be favourably viewed in Washington,” he said.

Ambassador urges UK to reopen North Sea

The remarks are the latest sign of the fraying relationship between Washington and London, which has spilled over into Donald Trump and Prime Minister trading a string of barbs over UK’s reluctance to get involved in the Middle East.

Donald Trump condemned Starmer as “no Winston Churchill” during a recent press conference, after he refused to let the US military launch attacks on Iran from British bases in the region. The Prime Minister meanwhile has accused the President of trying to pressure Britain into joining the offensive.

Stephens also unleashed fresh rebuke of the UK’s refusal to grant new oil licences, saying the UK could be a price setter for energy if it opens up the North Sea.

The ambassador has been a longstanding critic of the government’s unwillingness to to allow energy companies to drill for new oil, previously saying it makes the UK a difficult place to do business.

And speaking at Thursday’s industry body conference, he told delegates that both British and US firms were deterred from investing because of the UK’s sky-high energy costs.

He said: “The UK could certainly have more influence over its domestic energy price, if not be a price setter by using its domestic fossil fuel reserves.

“The solution here is energy addition, not subtraction. In the modern economy, we need all forms of energy on the table, including oil and gas.”