The European Elections Relevance and Impact in the UK

Written by Verity Barton

Despite the (sometimes) acrimonious Brexit negotiations, a strong political, economic and security relationship between the UK and the EU is important to both sides. In 2023, the EU accounted for 41% of UK exports of goods and services, and 52% of imports, demonstrating the continued importance of the EU as an economic partner to the UK, alongside a common approach to defending democracy and supporting Ukraine.

The upcoming European Parliament elections will be the first since 1979 without UK constituencies and without UK voters. Despite that, the upcoming elections and what they tell us about European politics, whether Ursula von der Leyen remains Commission President and who succeeds Charles Michel as Council President are relevant and important for UK political stakeholders and businesses.

Why it matters to UK politicians

With a UK General Election happening concurrent to the European Parliament elections, both the Conservative and Labour Parties will be looking to tread a fine line on the UK’s relationship with the EU after fractious period, not just with voters, but also with MPs in their own parties. However, with a need for collaboration and joined up thinking to counter Russian aggression and misinformation in Europe, and the Trade and Cooperation Agreement Review due in 2025, both major parties will be acutely aware of the impact these results could have.

The Leaders and their Foreign Affairs spokespeople will want to understand what the results mean for the political direction of the Council, and who succeeds Maroš Šefčovič. This will be critical for any attempt by the next Government to ease trade barriers, see movement on visa restrictions and find consensus on equivalence and regulatory cooperation for the financial services sector.

Following a hard-fought return to power sharing in Northern Ireland and the inclusion of the Stormont Brake in the Windsor Framework, Ministers, Shadow Ministers and officials in Whitehall alike, as well as MLAs and Civil Servants in Northern Ireland will be closely watching what the new Parliament means for EU rules that may apply in Northern Ireland.

It’s also worth considering that some backbenchers will seek to use the party grouping results to read the political tea leaves and influence the direction of their leadership accordingly – especially Conservative backbenchers who want to push the Conservative Party further to the right after what many assume is likely to be a Labour win in the UK on July 4.

With Russian misinformation attacks and its invasion of Ukraine set to dominate the European political and security landscape for some time to come, Britain’s relationship – and ability to cooperate – with the EU, European Governments and the European Political Community matters. Shadow Foreign Secretary David Lammy will hope that that a desire to reach consensus on security and defence will give a future Labour Government a chance to re-set the relationship with the EU and open the door to conversations on removing trade barriers. The extent to which that re-set is possible, will be largely dictated by the political makeup of the next Council

Will UK voters care?

Following a close referendum result and calls from some quarters for a second, confirmatory poll, there is no doubt that a significant proportion of voters want to see the UK Government build and maintain a stronger and close partnership with the European Union; indeed, there are many who would like to see the UK re-join. Despite this, UK voters – except perhaps the most ardent of psephologists – are unlikely to be following the detail of the Parliament elections. However, there will be many who will be interested in what the party splits tell us about which way the political winds are blowing across the continent. What will be of more interest to some is whether VDL can remain in post and who emerges as the President of the Council and what that means for the UK / EU relationship going forward.

Why these elections matter to UK businesses

Strong trade between the EU and the UK matters to the UK economy, with 4 of the UK’s top 5 biggest trading partners being EU countries, and the value of the EU as an export market nearly double that of the US, the UK’s single largest export market. We know that UK businesses which export to and import from the EU want as frictionless trade as possible and crave certainty over rules and deadline implementation. A necessarily complicating factor is the unique status of Northern Ireland both in the UK internal market and the EU single market.

Business and industry groups such as the Confederation of British Industry, Make UK and the Federation of Small Businesses will be acutely aware of the impact these elections could have on realising as frictionless trade as possible. Alongside the wider political impact, business groups will be interested in any EU moves to advance or wind back the Green Deal and the influence this could have on a future Labour Government and its Green Investment Fund commitments.

The industries and sectors that may find their regulatory framework influenced by EU thinking – and therefore the political composition of the Parliament – are tech and financial services. Labour has sought to build a relationship with business, particularly in the City, and made a commitment to a more collaborative relationship with the EU in its policy paper, Financial Growth, earlier this year. We can expect to see industry bodies TechUK and TheCity UK following the results and further policy change, including any regulatory changes from ESMA with increased interest.