King's Speech 2026: European Partnership Bill

European Partnership Bill

“My Ministers will introduce legislation to take advantage of new trading
opportunities, including a Bill to strengthen ties with the European Union.”

● UK citizens back a closer relationship with the European Union (EU) where it
benefits the national interest. Businesses across the UK tell us they are being
held back by red tape when trading with Europe.

● The European Partnership Bill will help deliver the manifesto commitment to
improve the UK’s trade and investment relationship with the EU by facilitating
the implementation of new deals agreed with the EU now and in the future.
This includes deals on electricity, emissions trading, and food and drink.
Through tearing down unnecessary barriers to trade we will drive economic
prosperity, including growth and jobs, and ease cost pressures for UK
families. The Bill will support trade with both the EU, the UK’s largest trading
partner, and within the UK Internal Market.

● For example, the food and drink deal alone could add up to £5.1 billion a year
to the economy (and up to £9 billion when combined with the emissions
trading agreement), increase agricultural exports to the EU by 16 per cent and
cut queue times for lorries at the border. The agreement will also significantly
simplify the movement of food and plants between Great Britain and Northern
Ireland, while retaining Northern Ireland’s access to the EU’s single market.

What does the Bill do?

● Following the first UK-EU summit in May 2025, the UK-EU Common
Understanding set the stage for new agreements on food and drink,
emissions trading, and electricity. These agreements will reduce barriers to
trade, cut costs for businesses, and drive growth and investment. Since the
Summit, the UK and EU have been negotiating the detailed legal texts on the
new agreements, including UK decision shaping rights in areas where we will
be aligning.

● The Bill will provide a framework of powers to ensure agreements with the EU
can be implemented now and in the future, including:

o Powers to fulfil treaty obligations in the agreements with the EU
where it serves the national interest. This will enable the domestic
implementation of relevant commitments so that the benefits of the

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 agreements can be unlocked. These powers will mean that Parliament
has its say before EU law is applied in the UK.

o A power to extend the application of the Bill to new treaties with
the EU in the future. As highlighted by the Prime Minister, the Minister
for European Union Relations, and the Chancellor of the Exchequer,
the Government believes further alignment could support even more
prosperity. The Bill will set out how these powers can be used for future
treaties and ensure there is Parliamentary approval for any new
treaties before those powers can be used.

Territorial extent and application

● The Bill will extend and apply to the whole of the UK.

Key facts

● The EU is the UK’s largest trading market. In 2024, 46 per cent of the UK’s
total trade was with the EU, valued at £830 billion and almost 95,000 UK
businesses exported goods to the EU while around 158,000 businesses
imported goods. Nine of the UK’s top 20 export destinations for goods and
services are EU Member States, and 10 of the UK’s top 20 import sources are
EU Member States.

● There is a growing body of evidence showing that the trading
arrangements under the Trade and Cooperation Agreement have
weakened the UK’s trade and economic performance. 2020 estimates
predicted a four per cent reduction in the productivity of the UK economy in
the long run. More recent independent studies indicate the impact on Gross
Domestic Product could be as much as eight per cent.

● The emissions trading agreement, which will link the UK and EU
emission trading schemes, will establish a larger and more stable
carbon market. This will support industry confidence to invest in new
technologies and jobs, and to decarbonise more quickly and efficiently. It will
also create the conditions for mutual exemptions from respective Carbon
Border Adjustment Mechanisms (CBAM), saving £7 billion of UK exports from
being exposed to the EU CBAM.

● The food and drink deal (the Sanitary and Phytosanitary agreement) will
fulfil the manifesto commitment to deliver a veterinary agreement with
the EU. It will remove significant administrative costs for businesses, including
Export Health Certificates costing up to £200 for agri-food goods,
Phytosanitary Certificates costing approximately £25, and inspection fees
which can cost hundreds of pounds. It will also remove a broad and

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 wide-ranging set of requirements for goods and plants moving from Great
Britain to Northern Ireland, because the same regulations will be followed
across the UK.

● Combined, the food and drink deal and emissions trading agreement
could deliver up to £9 billion to the UK economy a year over the longer
term, as well as easing pressure on consumer food price inflation.

● Negotiating an electricity agreement with the EU will make electricity trade
with European partners more efficient, reduce average electricity prices,
increase exports, strengthen energy security, drive investment in the North
Sea, and help to achieve the Government’s aim of Clean Power by 2030.

● The Chief Executive Officer of Morrisons, Rami Baitiéh, said “Sweeping
away trade barriers with the EU will remove cost, complexity and delay in food
imports from the continent. This promises to ease a source of pressure on
food prices and is therefore good news for shoppers. As a fresh food
manufacturer we also welcome the prospect of key export markets for our
excellent meat and fish becoming more accessible.”

● The Chief Executive Officer of the Association for Financial Markets in
Europe (AFME), Adam Farkas, said “AFME welcomes the UK Chancellor’s
focus on growth and her pragmatic approach to the EU–UK relationship [...] A
stronger framework for deeper EU–UK financial services cooperation is
essential to support growth, enhance regulatory certainty and unlock
investment across Europe.”

● The Head of Trade Policy at the British Chambers of Commerce, William
Bain, said “A permanent deal with the EU can’t come soon enough for UK
firms. In the talks ahead ministers must deliver a deal that truly unburdens
business and cuts costs. Consumers will then reap the benefits in their
shopping baskets. Making trade with the EU quicker, cheaper and simpler is
crucial to boosting economic growth in the years ahead.”

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