Labour calls to rejoin EU customs union will become harder for Starmer to resist
When Keir Starmer stood on the Labour conference stage in 2018 and defied Jeremy Corbyn to call for a second Brexit referendum with remain as an option, it put him in pole position to become the next Labour leader.Starmer must now feel a sense of deja vu watching Wes Streeting, the most out-and-out pretender for the leadership, follow a similar playbook.In an interview over the weekend, the health secretary strayed from the official government line to call for “a deeper trading relationship” with the EU.Speaking to the Observer, Streeting implied that joining a customs union with Europe would give Labour a distinctive message with which to take on Nigel Farage at the next general election.To many Westminster observers, the obvious point is that, like Starmer’s intervention in 2018, Streeting’s remarks align him with the Labour members and voters who overwhelmingly support stronger ties with Europe.
Polling by YouGov published this weekend suggested that 80% of those who backed Labour in 2024 support negotiating a customs union deal with the EU.Seventy-three per cent backed talks to rejoin the EU entirely.Most intriguingly, however, Streeting’s remarks speak to a growing section of Labour MPs – including some senior cabinet ministers – who lament the government’s promised “reset” of EU relations as decidedly unambitious and who believe that going further could be a gamechanger for economic growth.What MPs and ministers have been telling journalists privately for months is increasingly said openly.Before Streeting, David Lammy, the deputy prime minister, suggested that rejoining a customs union with Europe would be desirable and had been beneficial to countries such as Turkey.
No 10 has repeatedly ruled this out on the basis that it would rip up the UK’s independently negotiated free trade deals.During their disastrous attempt to flush out a Streeting-led coup last month, Starmer’s allies briefed journalists that anyone who replaced him would take a more pro-EU approach and jeopardise international relationships, including with Donald Trump.But recent developments in Britain’s trading relationship with the US, which is unarguably the highest-profile benefit of having an independent trading policy, call the advantages into question.The US has suspended a much-vaunted “tech prosperity deal” over wider disagreements.And as for a deal to avoid threatened US tariffs on pharma, only the headline terms have been agreed so far.
Most importantly, the free trade deal the UK agreed with the US in May – which puts 10% baseline tariffs on British exports, lower than the 15% on European exports – as well as deals with India and other powers may be a publicity win, but they have been deemed to have a negligible impact on economic growth.One senior business figure called them “performative”.All this means that the political imperatives and the economic realities point to one thing.As the parliament slowly trundles on towards the next election and Starmer’s critics circle, the pull of promising to rejoin the customs union will become harder and harder to resist.Prospective leadership contenders, backbench MPs across different factions and Labour’s core voters are all calling for more.
Starmer’s No 10 is clear that its manifesto “red lines” ruling out a return to the customs union, single market or freedom of movement – language that already seems hopelessly outdated to some Labour MPs – only apply until the next election.“Hopefully we’ll be in a position to go into the next election saying, look, we have done all we can within the confines of what we inherited,” one minister told the Guardian.“But if we want to push on, then some sort of commercial union with our neighbours may be the next place to go.”Perhaps the biggest practical obstacle, and one that government figures point to in private, is the difficulty of negotiating with Brussels and the high prices it seeks to exact for any concessions.Talks for UK defence companies to play a larger role in the EU’s Safe fund collapsed over money last month, after strong resistance from France.
Negotiations in other areas of the UK-EU relationship including a food standards deal only began weeks ago, a full six months after Starmer’s summit with Ursula von der Leyen, because of delays in the EU obtaining its mandate.And the two sides remain far apart in youth mobility talks, with Brussels demanding an uncapped scheme and lower fees for European students studying at British universities.The bottom line is, amid the growing clamour to go further and faster, the government faces an uphill battle just to secure the limited things it has already promised.
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