Britain is approaching 10 years since it voted to leave the European Union in a razor-thin referendum – but the debate over what comes next for the UK’s relationship with the bloc persists.
Sadiq Khan has said that UK membership of the EU is “inevitable” and has called on the Government to commit to rejoining the customs union and single market before the next general election, expected in 2029.
The Government’s official position remains that it will not do so.
But a pattern of ministerial language and mounting internal pressure has prompted questions about whether that position can hold.
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Starmer once campaigned for a second referendum
As shadow Brexit secretary, Sir Keir Starmer argued in 2019 that Labour should campaign to Remain in a second referendum. Since leading Labour to a majority at the 2024 general election, he has ruled out seeking to rejoin the EU.
In January this year, the Prime Minister also told the BBC that the UK should consider “even closer alignment with the single market” where it was in the national interest. He said: “That needs to be considered on an issue-by-issue, sector-by-sector basis.”
The Government said at the time the remarks represented no change in policy.
Reeves said following EU rules should be ‘the norm’
Chancellor Rachel Reeves argued in her Mais lecture at Bayes Business School this week that where it was in the national interest, the UK should be “prepared to align with EU regulation, including in further areas of the single market”.
She said regulatory independence should be “the exception, not the norm.” Treasury sources confirmed the Government is “looking at more alignment” with the bloc across “several sectors”.
Reeves insisted she was not trying to “turn back the clock” on Brexit but to build a “new and stable future relationship” with Brussels, and acknowledged she would have to “make and win the political argument”.
Cabinet ministers have stopped ruling out a customs union
Business Secretary Peter Kyle told The i Paper in Brussels last month that “the debate about [the customs union] needs to be engaged with”.
But he warned that going back into the trading bloc would take years and would not prove “the quick fix that some people think it is”, noting that Turkey’s own accession to the arrangement took decades.
In December, Health Secretary Wes Streeting also told the Observer that the customs union could have “enormous economic benefits” for the UK.
“The best way for us to get more growth into our economy is a deeper trading relationship with the EU,” he added.
Streeting ruled out a “return to freedom of movement”, but his comments appeared to leave the door open to the idea of a customs union-type agreement.
Starmer’s chief economic adviser Minouche Shafik has also reportedly advocated internally for closer EU ties. In the run-up to the Budget, she is understood to have made the case for rejoining the EU’s customs union to deliver a boost to British exporters.
Keir Starmer meets with European Commission President Ursula von der Leyen (Photo: Omar Havana/AP)
Labour mayors are calling for a full customs union return
Tracy Brabin, the Mayor of West Yorkshire, returned from a trade delegation to Germany and Switzerland this year calling for Britain to go further on Europe.
“If we are serious about growth, we must be braver about our relationship with Europe,” she told The i Paper. “That means a customs union relationship with the EU.”
Andy Burnham, the Mayor of Greater Manchester, made the same argument at the Labour Party Conference last year.
“I do think you call out what has put the country in this position,” he said, arguing the UK should rejoin the trading bloc. “The growth is not there as it once was.”
Khan went further still this week, saying the damage of Brexit was visible “on a daily basis” and that rejoining the EU was a matter of when, not if.
“I think it’s inevitable — the direction of travel at some stage we’re going to rejoin the European Union,” he said.
Labour leadership candidates are staking out softer Brexit positions
With big losses expected at May’s local elections, Labour insiders told The i Paper that potential leadership candidates are already sounding out Brexit experts and positioning themselves on Europe ahead of a possible contest.
A Labour insider said contenders from “across the board” of the party’s factions are considering moving closer to the EU, amid fears that the Government’s reset is too incremental to deliver growth or win back votes.
“There is a fairly clear consensus across the party that Brexit hasn’t worked, that voters can see it hasn’t worked, and that the Government’s ‘reset’ isn’t going to give us nearly enough growth or credit with voters,” the insider said.
But not everyone in Labour agrees
Deep divisions remain within the party. Even among pro-European Labour MPs, a customs union does not command unanimous support.
One told The i Paper the “real prize” was a relationship modelled on Switzerland — a patchwork of sector-by-sector deals — rather than a formal customs union. “Wes will regret going for customs union as it’s a lot of pain for little gain,” they said.
A “Red Wall” Labour MP accused Streeting of raising the issue to burnish his leadership credentials. “He knows what he’s doing — playing to the membership,” they said.
Reform UK has also pledged to unpick any closer alignment with the EU if it wins power, and the party is consistently polling ahead of Labour.
What the Government has already done — and where it is stuck
In 2024, the UK rejoined Horizon Europe, the EU’s flagship research and innovation programme, which it had left as part of the Brexit settlement.
In December, it also agreed to associate with Erasmus+ from 2027 — the student exchange scheme that allows young people to study abroad for up to a year, and which the Conservative government had declined to rejoin on cost grounds.
But further progress has proved harder. The first is money — the EU wants the UK to contribute financially to reducing economic disparities between EU regions as the price of entry to its internal energy market.
The second is tuition fees. EU negotiators want European students in the UK to pay domestic rates — a move that could cost UK universities up to £580m, according to modelling shared with The i Paper.
The third is the fundamental tension. David Henig, director of the UK Trade Policy Project, said Brussels would push for “more on mobility and more on financial contributions “in return for any closer arrangement. “Britain is still trying to cherry-pick,” he said.