John Healey to press EU to include UK in 'Made in Europe' scheme

Highlights

• The scheme aims to protect EU manufacturing against outside competition, including from China
• About £15 billion of British automotive exports go to European markets each year
• Healey to reference lessons from the collapsed SAFE defence loans scheme

CHANCELLOR John Healey is to warn the European Union not to lock the UK out of its scheme designed to protect industries from unfair Chinese competition, at a meeting of EU finance ministers in Dublin on Friday (18).

Healey will push for closer UK-EU partnerships on tech, defence and manufacturing, and will call on the EU to design its "Made in Europe" programme that deepens ties with the UK "rather than erecting new barriers", Treasury sources told the BBC.

The scheme, officially called the Industrial Accelerator Act (IAA), is currently being considered by the bloc and aims to protect EU manufacturing with restrictions on goods from outside countries. There is concern in government that it could lock British firms out of European supply chains.

The policy is aimed at curbing reliance on Chinese components by prioritising European-made goods over those from outside the bloc, a worry for British auto-industry suppliers who feed into EU supply chains. About £15 billion of British automotive exports are sold into European markets each year.

Officials said Healey will tell European finance ministers it is important to "learn lessons" after talks collapsed last year over Britain joining the EU's SAFE defence loans scheme, a dispute that centred on how much money the UK would pay to join.

Panic button

Former UK trade negotiator Sir Crawford Falconer said the EU's original plan would have allowed free trade partners, such as the UK, to be included in the Made in Europe scheme, but a subsequent proposal recommended limiting membership to EU nations.

Sir Crawford said that caused "everyone to hit the panic button," adding: "If we weren't able to compete on equal terms, it would put the viability of some of our production facilities at risk."

Earlier this year, the Nissan car company said, "EU and UK manufacturing are deeply intertwined, and restricting eligibility for public support to EU-only assembly would damage competitiveness, disrupt integrated supply chains, and undermine Europe's EV transition."

Treasury officials said Healey wanted to reduce the economic impact of Brexit and build closer ties with the EU, but not at any cost to the UK.

Healey said: "The next chapter of Britain's growth story will be written in more places. To me, closer ties with the EU means British businesses – wherever they are based across the UK – get better access to both the supply chains and the customers they need to grow."

A Treasury source said: "The chancellor wants to make sure nothing holds them back."

A reset deal

According to the Financial Times, Healey will also indicate at the meeting that Britain could agree a "reset" deal with the EU, provided prime minister Andy Burnham's government could show that it "benefits people back home".

Britain's Labour government has been trying to improve trading ties with the EU since it was elected in 2024 but has so far struggled, failing, for example, to find a way to join the EU's SAFE defence fund last year.

A formal UK-EU summit was postponed from July after former prime minister Sir Keir Starmer resigned in June. Treasury sources now expect the summit to take place in November.

Healey's meeting in Dublin comes after it emerged earlier this week that he is in discussions about joining a global investment bank aimed at raising more money for defence spending.

He is considering a bid to join the Defence, Security and Resilience Bank (DSRB), not long after his predecessor Rachel Reeves rejected the idea.

Canada has been leading efforts to establish the bank, which supporters say would enable governments to borrow at lower costs to increase military spending.