John Whelan: Labour win brings hope for Irish exporters of better EU-UK ties

UK prime minister Keir Starmer vowed to champion farming, but uncertainty remains over UK agriculture, with questions lingering over Labour’s plans for post-Brexit farming policies. Labour’s manifesto did not mention a budget for farming.

After a historic Labour win in the UK, Irish exporters are cautiously optimistic about the new government’s plans for economic expansion.

The aim is for the UK to post the fastest sustained economic growth of the seven largest nations. If achieved, it will be an enormous boost to Irish exports, particularly the agri-food sector.

The pound sterling has bounced back on the news of the landslide election win and has returned to exchange rates not seen since before the Brexit vote in 2016. UK prime minister Keir Stamer has promised a prudent fiscal plan, which will be good for the pound.

The strong sterling will boost the competitiveness of Irish exports on the UK shelves, particularly food exports, which have been stagnant at €3.9bn since Brexit.

Some of the lost export sales are undoubtedly due to the UK insistence on new divergent standards from the rest of the EU, but the weakness in sterling brought on by the Brexit damage to the economy has also hit Irish exports.

Mr Starmer vowed to champion farming, but uncertainty remains over UK agriculture, with questions lingering over Labour’s plans for post-Brexit farming policies. Labour’s manifesto did not mention a budget for farming.

Irish fisheries hope for closer EU-UK collaboration. The Labour victory opens up the prospect of harmonisation and co-operation with the EU, although concerns remain about bans in marine protected areas. Since Brexit, the EU fleet has obtained new fishing rights in British waters, but it must give back 25% of its quotas by June 2026.

On the wider international trading front, the UK’s new foreign secretary, David Lammy, has pledged a foreign policy of “progressive realism”. He wants to “make Brexit work” and seek “an ambitious” security pact with the EU.

Divergence in standards has been at the root of most of the difficulties for both exporters and importers of manufactured goods and agri-food products.

The UK’s new foreign secretary, David Lammy, has pledged a foreign policy of 'progressive realism'. He wants to 'make Brexit work' and seek 'an ambitious' security pact with the EU. Picture: Lucy North/PA

The incoming administration needs to make decisions on these, many of which are well-advanced, and a call to scrap them would generate further decision-making quandaries.

British ministers will find their ‘in tray’ stuffed with requests for change: On gene editing, methane inhibitors, deforestation regulations, border operations, and trade policies, including tariff suspensions, foreign-free trade deals, sustainable use of plant protection products, the carbon border adjustment mechanism (CBAM), CE certification, and more.

The EU-UK Trade and Cooperation Agreement (TCA) is up for renewal in 2026, and the Irish export sector hopes that the negotiations will enable it to retain reciprocal access to British markets, without the need for the costly and continuous customs documentary procedures.

The Labour parties’ attitude to internationally-traded services is probably more important than to manufactured goods and agri-food, as it is now larger than Ireland’s global goods exports, totalling €367bn last year, and ranks the UK as its largest export market.

Irish services exports have not been impacted by Brexit, tripling in value since 2016, with exports to the UK doubling.

Last year, European Commissioner for financial services, Mairead McGuinness, signed a memorandum of understanding on financial services co-operation with then-UK chancellor Jeremy Hunt.

However, this is only a forum for the UK and the EU to discuss voluntary regulatory co-operation on these issues and is unlikely to affect the direction of international trade in services.

It remains to be seen how Mr Stamer views the future development of the financial services’ ‘go it alone’ approach, as promulgated by the Conservative Party since Brexit.

However, with European Commissioner elections under way, and fresh UK ministers coming to grips with their portfolios, it may well be some time before there is the headspace in either Whitehall or Brussels for fresh, aspirational policies to be pursued.