Labour MPs have urged Sir Keir Starmer to stall energy negotiations with the European Union. The Government is currently in talks about rejoining the EU’s Emissions Trading Scheme (ETS) carbon market as the Prime Minister continues to seek closer ties with the bloc as part of his “Brexit reset”.

MPs have warned Sir Keir not to hand Brussels a “black cheque” over net-zero rules, according to reports. In a letter to Downing, they said this threatens to “undermine” British business. They also warned UK firms could be placed at a “significant disadvantage” if forced to cover further costs on goods sold overseas — something competitors from abroad are not required to do.

Labour MP Henry Tufnell, chair of the Commission for Carbon Competitiveness, was one of the letter’s signatories.

While welcoming closer relations with the EU, he said, according to The Telegraph, that the UK “cannot lock ourselves into paths that do not match our industrial realities or decarbonisation timetables, and over which we have no say”.

He said the Government must “prioritise and protect” British firms, while striking a “linkage agreement” with Brussels.

“Getting the substance right is essential for both sides, and mustn’t be sacrificed for the sake of finalising a ‘reset’ deal before the next UK-EU summit in May,” he added.

The letter was signed by leading members of the Commission for Carbon Competitiveness.

It called on the PM to delay negotiations until the impact on British businesses is clear, The Telegraph reported.

The UK left the ETS scheme in late 2020 following Brexit and has since set up its own similar scheme designed to encourage firms to pollute less.

Rejoining would reportedly see the UK carbon price rise, making it even more costly for firms to pollute.

It is hoped this would push companies to look to slash emissions more rapidly and in turn, help hit net-zero targets.

However, there are warnings this could cause price hikes for consumers.

In response, a Government spokesperson told The Telegraph: “We are delivering on our commitment to secure a carbon linking agreement with the EU as soon as possible, which will exempt British businesses from EU charges on £7 billion worth of exports. We won’t comment on ongoing negotiations.”