Keir Starmer spent much of 2025 trying to paper over the damage to the UK of a divisive, poorly handled Brexit by his predecessors. In 2026, the Europe problem will return to haunt him.
The problem this time, though, is not a divide between Red Wall Brexiteers and stalwart Remainers. Starmer is a pro-European about to suffer an overdose of pro-Europeanism in his ranks, as support for re-entry into a European customs union sprouts. That trend has breached yet another of those problematic pre-election manifesto “red lines”, which clearly ruled out such a move; but then ferrets do tend to get reversed in the Keir era.
More consequentially, it opens a risky challenge to his way of dealing with the trade-offs of policy in the UK’s relations with the EU, the US, and the wider world.
One way or the other, “CU back in Europe” is the motto under which a growing number of supporters are marching, with less concern for the strictures the PM has applied to his “re-connection” with the continent.
Justice secretary and deputy prime minister David Lammy was first to bust through the omertà on re-writing Europe policy on the hoof when he mused on the benefits of Turkey’s bespoke deal in December, saying: “You can see countries like Turkey with a customs union seemingly benefiting and seeing growth in their economy.”
Two big leaps lurk in this statement. For one, the Turkey agreement is a partial and historic one – i.e. one unlikely to be repeated in current circumstances – and for another, it also rules out most agricultural products, coal and steel for public procurement, the very areas the UK most hankers for reductions in post-Brexit frictions and limitations in existing tariff-free deals.
Yet the underlying message is also echoed by other senior Cabinet folk and potential prime ministerial challengers in the year ahead. Most notably Wes Streeting, the Health Secretary, has called for openness to a “deeper trading relationship with the EU” as a solution to UK growth problems. Enthusiasm has spread to the Trades Union Congress, which had a go at the weekend at re-writing No 10’s Europe policy too: its leader Paul Nowak urged the PM not to rule out rejoining. Added to which, the Lib Dems recently peeled away a dozen Labour MPs in a tokenistic vote calling for talks to begin immediately on rejoining.
The only things missing from this heady mix are any discernible European enthusiasm for the idea, and a coherent sense of how it fits with the trade deals and agreements painstakingly negotiated by one Keir Starmer to boost the UK’s trading muscle over the last year.
Whatever his other shortcomings, Starmer has sought to move the UK close to institutional Europe while aiming for a sustainable trading pact with the US. Crucially, these include agreements on technology and AI, where the tensions between Europe and the US are deepening and the UK is seeking to carve out as far as possible its own positioning and attract major US companies to invest, while combatting hate-speech but dodging the conflict of the EU and the Trump-Vance attacks on European digital laws.
Starmerites often bemoan the lack of media or public gratitude for advances in a shaky first year: he has succeeded in signing a major Trans-Pacific Partnership and a bespoke deal with India, which eluded his predecessors, and dealt intelligently with a mercurial US President to scope out the outlines of agreements which do marginally less damage to the UK than the blast of trade hostility intensifying between Washington and the EU.
All of this is knitted into a plan to keep “global UK” on track, with royal visits to the US in the year ahead. Someone needs to do a better communications job on the Prime Minister’s trade story, which is not at all a bad one in 2025. But that is nigh-on impossible if the underlying belief is that the EU is the solution to the UK’s growth deficits.
For one thing, it is the opposite direction of travel to a “pragmatic” (to use a very Keir word) need to accept that the headwinds of a remorseless US presidency can do damage – and that EU reconnection needs to go hand in hand with securing the best protection possible on that score for the UK.
In essence those who want to use the customs union to move “closer to Europe” still need to explain how they assess the forfeits of a falling out with the US which could follow (and which would frankly be epic), losing freedoms in important areas of potential for the UK across AI and technology, and why low-growth Europe – with a tendency to ice out competitors – would be such a game changer for the UK.
The “botched Brexit” line is one built on a deeper desire to set the UK back on course to rejoin the EU, or as near as dammit, via single market membership. It would be a more enticing prize for a big reset – but it would also mean fully reversing the 2016 leave vote. When push comes to shove, I doubt Labour has the stomach for that. The trouble with using the customs union as a way-marker is that it does not satisfy the claimed benefits on growth, and so it comes across as a Trojan horse to those who distrust Labour’s commitments with not much clear gain.
In effect, reconnection is really happening where it counts right now, via the UK’s enhanced role in defence and security agreements to shore up Europe against an active Russian threat. Vladimir Putin has ensured that many areas of co-operation will intensify, not weaken. But these are deals largely outside the EU’s strictures and when Brussels did get involved, it was to block – for instance, UK access to the SAFE agreement for loans to boost weapons production after France demanded a higher entry price than the UK was prepared to pay. That has resulted in Britain retaining access to only around a third of the loans’ potential.
It’s a reminder that any attempts to get into a customs union would run foul of an instinct which still sits deep within the EU – namely that the UK cannot benefit too much from being outside it.
Pretty soon in the new year, Starmer will have to decide whether the customs union genie is allowed to waft around his government – or to stuff it back into the bottle, making clearer why he believes the policy of “small steps” of European reconnection and security alignment is the one with fewer downsides.
His challengers would then have to explain more clearly why they think they have a better idea. And the most likely outcome is that foreseeably, it’s a dream, not a plan.
Anne McElvoy is executive editor at Politico and co-host of Politics at Sam and Anne’s
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