With a crucial EU–UK summit approaching, London is seeking assurances that British manufacturers will not be disadvantaged by Europe’s new industrial policies. The dispute exposes a wider problem: how closely Britain must align with Brussels to preserve access to European supply chains.
Britain and the European Union are attempting to resolve an increasingly consequential dispute over European industrial policy, as proposed rules favouring domestically manufactured goods threaten to complicate the economic relationship that London has spent much of the past year trying to rebuild.
Business Secretary Jonathan Reynolds said on 27 October that the two sides were making progress towards addressing concerns surrounding the proposed Made in Europe requirements.
Speaking to Sky News, Reynolds said the governments were “finding a way through” the disagreement, although the precise terms of any compromise remain uncertain.
The negotiations come ahead of the EU–UK summit scheduled for 20 November, when Prime Minister Andy Burnham is due to meet European Commission President Ursula von der Leyen and European Council President António Costa.
For British manufacturers, the immediate issue is whether political promises of closer cooperation can prevent new economic barriers from emerging.
The legislation would introduce European-origin and low-carbon requirements into public procurement and certain government support schemes covering strategic industries.
Among the sectors affected are steel, cement, aluminium, automotive manufacturing and technologies associated with the energy transition.
Brussels argues that such measures are necessary to strengthen European manufacturing and reduce dependence on overseas suppliers, particularly in industries exposed to competition from China.
The economic difficulty is that European industrial production does not stop at the EU’s external borders.
British manufacturers supply components, materials and specialist engineering services to European factories, while many UK production facilities rely on parts and technologies imported from the continent.
Automotive manufacturing illustrates the problem.
Vehicles assembled in Britain frequently contain components produced in several EU countries. Equally, European automotive manufacturers incorporate British-made parts into their own production.
If eligibility for subsidies or public contracts depends increasingly on where products and components originate, companies could face incentives to reorganise supply chains.
The question is therefore not merely whether British products can enter the European market, but whether they will qualify for the same industrial support arrangements as competing European products.
France and Germany disagree
The dispute has exposed differences among EU governments.
As EU Today reported earlier this month, France has argued for a restrictive interpretation of European origin requirements, while Germany has favoured a broader approach allowing certain trusted trading partners to participate.
Berlin’s position reflects the interests of industries whose production networks extend beyond the EU, including manufacturers operating in Britain.
According to reporting on the negotiations, France and Germany have discussed a potential compromise under which Britain might receive preferential treatment if it aligns with European tariffs on Chinese goods.
Such an arrangement would have implications extending beyond manufacturing.
It would involve coordination over trade policy towards China, an area in which Britain currently retains independent decision-making authority.
No agreement has been finalised, and any legislative compromise would require approval through the EU’s institutional procedures.
Burnham’s broader European calculation
For Burnham’s government, the industrial disagreement coincides with a wider attempt to redefine relations with Brussels.
The forthcoming summit is expected to concentrate on practical agreements covering agricultural and food trade, emissions trading and temporary mobility arrangements for young people.
A sanitary and phytosanitary agreement could reduce inspections and documentation requirements for certain food products moving between Britain and the EU.
Closer coordination between emissions trading systems could also reduce complications created by different carbon-pricing regimes.
However, these initiatives do not resolve the wider question of Britain’s relationship with the European single market.
Burnham has indicated that he intends to open a broader discussion about future options, while maintaining Labour’s existing commitments against rejoining the single market, customs union or restoring general free movement during the current parliamentary term.
Reynolds has acknowledged that repeated changes in EU policy create uncertainty for British companies operating across the Channel.
The price of industrial cooperation
The underlying difficulty is structural.
Britain seeks the benefits of close industrial integration while maintaining the independence acquired through Brexit. The EU, meanwhile, is increasingly using common industrial rules, subsidies and procurement preferences to pursue economic-security objectives.
These priorities are not necessarily incompatible, but reconciling them may require new arrangements governing regulatory alignment, product origin and relations with third countries.
As EU Today previously examined, London’s request to be treated as a trusted industrial partner has already become part of the broader political negotiations.
The November summit may establish a framework for resolving some immediate concerns.
It will not, however, eliminate the fundamental problem facing British manufacturers: future decisions taken in Brussels can materially affect their competitiveness, even though Britain no longer participates directly in making those decisions.
Thousands of demonstrators have gathered outside Portugal’s parliament as rising property prices, disputed eviction legislation and police operations bring the country’s housing problems into direct confrontation with the government.
Thousands of protesters gathered outside Portugal’s parliament in Lisbon on 27 October, demanding action over soaring housing costs and criticising police operations against housing activists, as the country’s long-running property crisis developed into a broader political confrontation.
The demonstration coincided with parliamentary debate on the government’s proposed 2027 budget and followed several days of protests in Lisbon and Porto.
At the centre of the dispute is an increasingly familiar European contradiction: property values continue to rise, while wages and household incomes have failed to keep pace with the cost of obtaining accommodation.
For Portugal, the problem has become particularly pronounced.
House prices have more than doubled since 2017, while rents for newly agreed tenancies have almost doubled over the same period.
According to figures reported during the demonstrations, the cost of housing in Portugal increased by 147 per cent between 2015 and 2025, compared with an EU average of 60.5 per cent.
The result is a growing disparity between earnings and the cost of independent living, particularly among younger adults.
A property market detached from wages
In Lisbon, a one-bedroom flat can routinely command monthly rent of approximately €1,500.
Portugal’s minimum wage stands at €920 per month before tax.
Although these figures do not represent every household or property, they illustrate the scale of the affordability problem for lower-paid workers.
Between the first quarters of 2025 and 2026, Portuguese house prices increased by almost 20 per cent, according to national statistical figures cited in recent reporting.
Rental costs have also continued rising, recording an increase of approximately 68 per cent since 2020.
The country’s attractiveness to foreign investors, retirees and remote workers has contributed to demand, particularly in Lisbon, Porto and coastal areas.
Tourism has introduced additional competition for residential property, with some homes converted into short-term accommodation.
However, investment and tourism are only part of the explanation.
Restrictions on construction, administrative delays, limited affordable housing supply and the geographical concentration of employment have also contributed to pressure on the market.
These conditions have produced a widening gap between those who already own property and those seeking to purchase or rent their first home.
Disputed eviction legislation
The immediate political confrontation concerns government proposals that would accelerate certain eviction procedures and remove restrictions on rents for new tenancy agreements.
The legislation passed its first parliamentary reading, with the right-wing Chega party abstaining.
Housing campaigners argue that removing protections without first increasing affordable supply could leave tenants more exposed to rising rents and displacement.
The minority centre-right government, led by Prime Minister Luís Montenegro, has pursued measures intended to encourage construction and increase the availability of housing.
These include tax reductions for new building projects and a commitment to deliver 145,000 homes.
Such measures, however, require time before additional properties become available, while many households face immediate financial pressures.
Police operations become a second controversy
The housing dispute intensified following police operations to remove protest encampments in Lisbon and Porto during the weekend.
Police used batons during the clearances, while campaigners alleged excessive force.
Portugal’s internal affairs watchdog has opened an inquiry, while prosecutors are conducting a separate investigation into officers’ conduct.
Montenegro defended the police response in parliament, arguing that officers had acted according to the principles of necessity, proportionality and adequacy.
President António José Seguro has convened a meeting of the Council of State to consider the growing protests.
The dispute has consequently expanded beyond housing economics to include questions about policing, public demonstrations and political accountability.
A European problem with national consequences
Portugal’s demonstrations follow similar protests in Spain and growing political scrutiny of housing affordability elsewhere in the EU.
The European Commission has begun addressing the issue through initiatives intended to encourage construction, facilitate investment and give authorities greater legal certainty over short-term rental restrictions.
As EU Today recently reported, the proposed European Affordable Housing Act would provide additional regulatory tools for areas facing severe housing pressure.
Yet the principal responsibilities for housing supply, planning and tenancy law remain with national and local governments.
This division creates a political challenge: Brussels can support investment and coordinate legislation, but the most immediate decisions affecting rents, construction and evictions are taken elsewhere.
For Portugal, the next test will be whether the government’s housing measures can deliver sufficient additional supply while responding to demands for immediate tenant protection.
The demonstrations outside parliament show that housing affordability has become more than a question of property prices. It now affects the government’s legislative agenda, the 2027 budget debate and the relationship between the authorities and an increasingly organised protest movement.
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