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The PM could make real progress on the cost of living by dumping the EU reset

Mr Burnham inherits a ruinous half-completed EU reset negotiation. If he is serious about raising living standards and listening to voters, he should pull out of the talks.

The Labour 2024 Manifesto was right to say that the government would keep us out of the single market, the customs union and freedom of movement. The likely deal breaks all these promises. So far there is no news that it can deliver the very modest aims of easing the restrictions on touring musicians or obtaining mutual recognition of professional qualifications also in the Manifesto. 

As Mr Burnham departs on his listening journey, he will find welcome support for his idea that the cost of living is voters' main preoccupation. Family budgets are too squeezed and living standards have at best stagnated. People want improvement. 

He will also discover that the second big preoccupation is to him the less welcome strong feeling that illegal migration is an expensive pressure on housing, utility supplies and communities. People do not just object to seeing illegal arrivals put up in good hotels that the communities would rather use for travelling businesspeople, tourists,  local events,  weddings and special occasions.

They also object if the illegal arrivals  are given priority for social housing, or seek family homes converted into Houses of  Multiple Occupation.  People want stronger border control, not a new way of housing the results of weak borders.  He will also hear, if he listens, that opening up safe routes so the illegals can all become legal is not what people have in mind either.

The leaked plans for reset will worsen the cost of living pressures. Joining  the EU carbon emissions trading scheme means imposing a higher tax on energy intensive goods which we will have to pay. Imposing a carbon border tax (CBAM) on imports from outside the EU will mean dearer energy intensive products which we rely on. These will mean  rises in prices as the tariffs and taxes are imposed.

The giveaway of 12 more years of large amounts of our fish for nothing in return means we cannot rebuild our home fishing industry and have a better supply of local fish. 

The proposed SPS Agreement on food trade will mean the imposition of a large number of unwanted rules on the many small UK companies and producers who do not export to the EU. This will involve them in extra costs that will help push up domestic prices. 

The EU demand that the UK makes a so-called “Solidarity payment” to secure the deal will come on top of stated charges for rejoining parts of the EU single market for their administration. This implies a tax rise for us to pay the extra bills, as the government has run out of room for yet more borrowing which would simply defer the cost and up the interest bill burden on all of us.

Rejoining the Erasmus student scheme to replace the Turing one  means a far worse deal for UK taxpayers and students. UK students will lose the opportunity to go to non EU universities. Taxpayers will be paying an extra £700 m of tax to meet the bill, which will largely go to EU students coming to the UK. If the UK concedes domestic discounted student fees for EU students the universities in the UK will have to hike the fees for all students to make up the shortfall, hitting UK young people yet again. 

The proposed Youth Opportunity scheme is a version of freedom of movement for all under 30 year olds. There are so many more on the continent than in the UK, and many there want to come to the UK to learn English. Where will the government house them all? Will they qualify for free benefits and free public services? How will those bills be paid?

So here is some good free advice to Mr Burnham. If he is serious about wanting to control the cost of living, he needs to control public spending and the costs facing UK business. The current EU re set plans do the opposite. So scrap them. We do not need dearer energy and higher taxes to pay for the EU's demands. 

If he picks up on his travels the anger about weak borders, he needs to close down the talks on more young people getting the right to come here from the EU. The difficulty the EU is having in controlling its own borders reinforces the message from the public that we need stronger controls, not weaker rules. Making illegals legal is not the answer most people want.

John Redwood
John Redwood

Sir John Redwood, Baron Redwood is a British Conservative politician, academic, and former MP for Wokingham (1987–2024). A prominent Eurosceptic and free-market advocate, he served as Secretary of State for Wales (1993–95) under John Major and challenged Major for the party leadership in 1995.

Educated at Kent College, Canterbury, and Magdalen College, Oxford (Fellow of All Souls), Redwood worked in merchant banking and as head of Margaret Thatcher’s Policy Unit, driving privatisation. Knighted in 2019, he was elevated to the House of Lords as Baron Redwood in January 2026. Sir John is a prolific author and commentator on economics and EU issues.