Gulf pact next after EU trade deal, says Reeves

The UK wants to strike a trade deal with countries in the Gulf, including Saudi Arabia, UAE and Qatar, as its next move, Chancellor Rachel Reeves has told the BBC.

She claimed the UK was now in a better place on trade "than any other country in the world", following major trade deals with India, the US and the EU that were signed this month.

Reeves also suggested that the prospect of closer trading relationships would boost forecasts for UK growth.

But opposition parties have criticised the government for some of the concessions offered in return for trade deals.

In early April, the government said it was continuing discussions with Gulf nations, started by the previous Conservative government, which focused on boosting UK food and drink, renewable energy and manufacturing exports, and attracting more inward investment into the UK.

If that is the government's next deal it may prove politically controversial, given the human rights record of some of the six countries involved.

However, Reeves said the UK was "not looking to have trade negotiations with China", which could raise similar objections.

Reeves was speaking to the BBC in the wake of the announcement of a trade pact with the EU on Monday, which has prompted criticism from opposition parties.

Conservative leader Kemi Badenoch said the latest EU deal took the UK "backwards", while Reform leader Nigel Farage said on social media that Labour had "sold out" the fishing industry and called the EU an "ever-diminishing political union".

Meanwhile, Liberal Democrats leader Sir Ed Davey said the EU deal was a "welcome stepping stone", but called for the government to go further and agree to a customs union.

The deal with the EU, including fishing, trade, defence and energy, marks the biggest agreement between the parties since the UK left the trading bloc in 2020 following the Brexit vote.

That pact follows hot on the heels of a trade deal with India which makes it easier for UK firms to export whisky, cars and other products to the country, and cut taxes on India's clothing and footwear exports.

The government has also secured an agreement with US President Donald Trump to reduce tariffs on some goods traded between the nations.

Reeves suggested to the BBC that Britain's economic growth forecast was on course to be upgraded as a result of the three trade agreements.

When the government's official forecasting body provides its assessment of the economy alongside the autumn Budget, it would take into account stronger than expected growth in the first three months of the year, and improved trading relations, she said.

"We are forecasting growth of 1% this year, and we had 0.7% in Q1 and they'll take into account the new trade deals that have been secured," said Reeves.

The "reset" with the EU only removes some of the additional barriers to trade resulting from Brexit, and so is only expected to boost growth by less than half a per cent.

Economists say more economic benefits could be gained from rejoining the single market and customs union and allowing freedom of movement, but those are "red lines" the government has said it will not cross.

A higher growth rate usually means people are getting paid a little bit more, can spend more and more jobs are created by businesses investing, but it would also give the chancellor more room to manoeuvre when it comes to tax or borrowing rises, or spending cuts.

However, the strong uptick in growth between January and March is not expected to last, in part due to the effect of US tariffs on global growth.

EU relations minister Nick Thomas-Symonds said business organisations and firms, ranging from defence to the supermarkets, had welcomed the agreement because it would be "economically advantageous up and down the country".

He conceded that not all of the government's ambitions had been achieved, including establishing new rules allowing musicians, performers, accountants and lawyers to work more easily in the EU.

Shadow foreign minister, Priti Patel, said she was "all for reducing cost and bureaucracy" but criticised the deal's "lack of detail".

Pushed on why the previous Conservative government had not pursued a new deal with the EU earlier she told the BBC's Today Programme the original Brexit arrangement had always been "transitional".

"We all knew we would go back and look at further discussions," she said.

It appears the government had the EU, the UK's largest trading partner, in mind during its talks with the US and India.

As part of the deal with the EU, in return for extending current fishing rules, checks have been reduced on UK food exports.

Reeves said UK officials had made it clear to the Trump administration and India that food standards were not up for negotiation in their agreements.

"We increased the quota for the import of beef from the US, it was all still on the high standards that we pride ourselves in, and in part because standards matter to us, but also because we wanted to secure this agreement with the EU, which is by far the biggest market for UK agriculture and fishing," the chancellor said.

Both sides agreed to cooperate further on a "youth experience scheme" allowing young people to work and travel more freely again, but this is subject to further negotiations.

Reeves described the recent trade agreements as having "come along like buses" and said "Britain is in a better place than any other country in the world in terms of deals with those countries".

"The first deal and the best deal so far with the US, we've got the best deal with the EU for any country outside the EU, and we've got the best trade agreement with India," Reeves added.

"Not only are these important in their own right, but it also shows that Britain now is the place for investment and business, because we've got preferential deals with the biggest economies around the world."