Will Keir Starmer dare to unpick Brexit?

The Prime Minister now wants Britain to be closer with the EU. After refusing to talk about Brexit in the election campaign, Keir Starmer has taken advantage of changing circumstances to put our relationship with Europe back on the political agenda. 

Starmer has the means, motive and opportunity to reopen negotiations. The means: a large majority and broadly pro-European parliamentary Labour Party. The motivation? The government is desperate for any policy that can end Britain’s anaemic economic stagnation, of which Brexit is one of several causes. And the opportunity: polling suggests that the public are open to a closer relationship.

The question is, what sort of a relationship does Starmer want? Labour has repeatedly ruled out joining the single market or customs union, red lines which feel quite déjà vu. They are the same red lines as Theresa May’s, the Remainer who took over from Cameron after his failed referendum campaign. 

Like Starmer, May also wanted to maximise the economic benefit of a close relationship while minimising political cost, and subsequently came up with the “Chequers proposal”, named after the PM’s country residence, in which it was conceived. Eight years on from its conception, this untested Tory deal offers a surprisingly plausible lodestar for Starmer as he scopes out his options.

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The basic idea of Chequers, assuming you haven’t thought about it since 2018, was to maintain the most economically beneficial aspect of EU membership – the single market for goods – while losing the most politically controversial – free movement of people. Chequers would also have had the benefit of removing checks on goods between Great Britain and Northern Ireland – avoiding the need for the Northern Ireland Protocol by effectively applying a similar arrangement to the whole of the UK. Crucially, the UK would retain control over non-goods regulations, its borders and some aspects of trade policy.

It was politics that killed Chequers. Theresa May’s own cabinet rebelled, as Boris Johnson smelled a political opportunity to take power by pushing for a harder Brexit. The DUP refused to support it, irrationally, for fear of the “backstop”, which ended up being more or less what Northern Ireland ended up with, in Johnson’s harder version of Brexit. 

Britain could have had a softer, less damaging version of Brexit if Labour had supported May’s deal. But Jeremy Corbyn refused, under pressure from Remainers in his own party (including Keir Starmer) who still held out hope for a second referendum and the chance to rejoin the EU.

Starmer faces neither the political constraints of May or Corbyn. Unlike any PM since Brexit, he has a large majority of MPs who want a closer relationship with the EU, and polling suggests minimal public opposition to the idea.

The real challenge comes from the EU itself. Brussels was never keen on splitting the four freedoms, and with its own populist and economic threats, reviewing the Brexit deal is far down its list of priorities. In 2018, both Westminster and Brussels understood the benefit of a quick deal. In 2026, the EU is reasonably happy with the Brexit deal. Policymakers in Brussels quite reasonably ask why they should commit to any new arrangement, in the knowledge that a future Reform (or Conservative) government could tear it up. Indeed, they have reportedly requested a specific “Farage clause” to guard against precisely that scenario.

If we assume Chequers is an unachievable but helpful lodestar, what are Starmer’s next best options? 

One plausible route is to seek exemptions on border checks for as many goods as possible, starting with those that are most important for UK consumers and exporters. The most obvious candidate is sanitary and phytosanitary (SPS), which basically covers food, which is already being negotiated in its own SPS deal. Few Brits object to EU food standards, and an SPS deal could lower food prices, a top priority for a government focused on the cost of living. 

Another candidate for exemption is inputs for manufacturing, particularly in the automotive sector. Many British manufacturers rely on frictionless trade with Europe, not just as an export market, but in the manufacturing process, which can involve parts crossing borders multiple times. Removing checks by aligning standards costs Britain some autonomy, but this seems well worth the economic benefit, not least because UK exporters already produce to EU standards anyway.

A more contentious area of potential alignment is on energy. Britain has some of the highest energy costs in the world, which is a significant constraint on growth, as well as an everyday worry for ordinary households. Rejoining the EU’s internal electricity market would allow us to trade electricity more efficiently with the EU, potentially reducing bills. However, alignment could come with significant costs: for instance, signing up to the EU’s Renewable Energy Directive could bind us to costly targets and mean we end up burning more biofuels to make up the difference. 

Outside of trade, Britain has signalled a willingness to expand youth mobility. Net migration to the UK has fallen quite dramatically, and is expected to fall further this year. This arguably creates rare political space to think about how Britain can attract the most economically productive migrants, an approach which is also more likely to command public support. Increased mobility (but not full free movement) could be part of Britain’s offer in return for a closer trading relationship.

Lastly, London and EU capitals will have watched Trump’s actions in Venezuela, and his recent sabre-rattling towards Greenland, with a significant degree of (mostly unexpressed) horror. Trump’s isolationism, Putin’s aggression and a revitalised Monroe Doctrine mean that the need for European geopolitical unity is greater than ever. 

Britain, as Europe’s biggest military power (on some measures), has a lot to offer in this regard. But it is difficult to see how this will play out in negotiations. The EU prefers to separate out defence-related negotiations from wider trade negotiations, and Britain tends to prefer to deal with European capitals bilaterally when it comes to defence and security. Ultimately, geopolitical events may force deeper defence cooperation, irrespective of any trade deal. 

The UK and the EU are bound by geography, trade and geopolitics. Any government with the means, motive and opportunity to forge a closer relationship should seize the chance. But Britain and Europe also share wider economic challenges which will not be fixed by integration alone. Like France, Germany and Italy, our GDP per capita is more or less the same as it was ten, 15 or even 20 years ago. Since the financial crisis, productivity has remained stagnant across the board in pretty much all Western European countries. We, like other European countries, need to get better at building physical infrastructure, homes near good jobs, and cheaper energy. Starmer is right to explore a closer relationship with Europe, but he would be unwise to bet the economy on it – let alone his survival.

[Further reading: Josh Babarinde: Lib Dems need to fight “for the soul of our country”]