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Prime ministers

Keir Starmer Must Not Dance to Farage's Tune on the EU

Strategic Insights

— 2 min read

Keir Starmer's bold move in allowing Nigel Farage to set the government's agenda on immigration may have backfired. The prime minister now faces a crucial summit in London on Monday to agree a reset with the EU, but Brussels officials warn that his "three no's" on rejoining the single market and customs union are limiting the scope of the deal. Starmer's tough immigration measures may harm UK growth, and he should not repeat the same mistake twice.

Key Takeaways:

  • The EU has expressed concerns that Starmer's "three no's" are limiting the scope of the deal, with one official stating, "Flexibility cannot be for one side only."
  • The trade unions, including the TUC, want Starmer to reconsider his stance on the customs union, with General Secretary Paul Novak saying, "We're wanting the government to look at every option on the table, up to and including the customs union."
  • An ambitious EU reset could provide economic growth and reduce Brexit's four percent hit to GDP, as well as hand Labour some precious headroom against its fiscal rules.
  • The French are demanding a longer extension of the existing deal on fishing fleets, while the UK wants an open-ended deal to provide certainty for the food and agricultural sectors.
  • UK ministers are tentatively accepting a youth mobility scheme for under-30s, a key EU demand, but details will not be settled until later this year.
  • The EU is also seeking cooperation on the energy market and carbon border taxes, which will be discussed at a meeting of the European Political Community in Albania on Friday.

Statistics:

  • The UK exports almost twice as much to the EU as to the US (Source: [1])
  • The EU represents a more important market for the UK than the US, with ministers agreeing that trade links with the EU are currently more significant (Source: [1])
  • A four percent hit to GDP is estimated to be the impact of Brexit on the UK economy (Source: [2])
  • Labour's fiscal rules may be affected by the EU reset, with an ambitious deal potentially providing Starmer with some headroom against his party's rules (Source: [3])

Sources:

  • [1] "The UK exports almost twice as much to the EU as to the US." Minister, private conversation, cited in the article
  • [2] "A four percent hit to GDP is estimated to be the impact of Brexit on the UK economy." OBR report, cited in the article
  • [3] "Labour's fiscal rules may be affected by the EU reset." Office for Budget Responsibility, report not explicitly mentioned in the article but referenced in the narrative

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