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A Caution for Keir Starmer from His Own History: Without Boldness on Britain's EU Exit and Europe, His Labour Rivals Might Be.

Back in 2018, it took just eight words to energize the party's annual gathering demonstrating the party was becoming disillusioned with Jeremy Corbyn. Although not exactly stirring rhetoric, the words met with wild cheering as most of the hall rose in spontaneous acclamation.

As the commotion died down, the then-Brexit spokesman, remained at the lectern, blinking in surprise. He wasn't really accustomed to his speeches having such an effect. His statement was simply: "Nobody is ruling out remain as an option". But context is everything.

During that darkly divisive time of 2018, departing from his agreed text like this was always going to be seen as laying down the gauntlet to Jeremy Corbyn, who was trying to prioritise leave supporters in working-class seats over the Europhile sentiments of his party. In just one speech, this grey-suited shadow Brexit secretary underwent a transformation – if only for a while – into a political gambler who championed the party's base against the leadership he would later replace.

The Shift of Stance and Closed Issues

In the years since, much has happened, especially for Starmer himself. One of his first acts after taking over from Corbyn in 2020 was to declare the Brexit issue had been settled by the 2019 national vote. During the most recent campaign, he repeatedly emphasised manifesto “red line” promises that forbade rejoining the European Union or its core structures.

Similar to Corbyn, the PM's approach has focused on winning Brexit-y voters in key seats, even if polling evidence indicates many of them have died or changed their minds.

Pressure Building on Europe

However, the tables have turned and Starmer is now to face the pressures of being a Labour leader. And, if EU relations may not be the central crisis in UK politics, the cap that has been kept tightly sealed for five years is beginning to rattle again.

The Prime Minister and Chancellor have ramped up the rhetoric regarding the damage caused by Brexit has inflicted on the UK’s economy. This serves as an effective tool with which to beat the Reform UK leader, who seldom discusses how leaving the EU was once his singular purpose and is still his sole political accomplishment.

And yet, the extent of the economic harm, reportedly has resulted in a national economy that is between 6% and 8% smaller than if it were still in the EU, towers over the micro-mitigation thus far implemented by ministers. The PM's much-touted re-set deal agreed with Brussels last summer provides gains measured in low decimal points.

Internal Pressure and Bolder Ideas

Rachel Reeves is one of those attempting to bypass entrenched interior ministry opposition to an expansive version of a growth-enabling program for young people allowing youths can move between the UK and the EU for work or study.

David Lammy has pondered publicly regarding the clear advantages of joining an EU customs pact, as several Labour backbenchers, including the chair of the Treasury select committee, recently supported a Liberal Democrat motion on customs union membership.

While Nick Thomas-Symonds, who oversees EU policy, who is now attending every cabinet meeting, maintains the red lines remain unchanged, there are ways these could be bypassed. One idea would be to announce the start of negotiations now for a more ambitious agreement, to be featured in the following election platform, with implementation only if securing a new electoral mandate.

The Prime Minister's Deep-Seated Scepticism

Yet, Starmer has most recently pouring cold water again cautioning that a return to a European customs area could undermine the trade pacts with the US, which he views as signature achievements of his government.

It is understood that Starmer's doubts run even deeper, stemming from three further factors.

  1. First, he believes a customs pact has been made significantly more difficult because his ministers busily de-aligning from EU regulations across a range of policy areas, including the environment.
  2. Second, the exorbitant price demanded from Britain for entry into the EU’s new defence fund and the ensuing failure of negotiations has led UK negotiators that former EU partners have little interest in offering favorable terms to the UK than in proving that Brexit does not work.
  3. Thirdly, the new US national security strategy, praised by the Kremlin, is viewed by key advisors in Number 10 as a reason for the UK to keep its distance from Europe.

A Bizarre Document and Strategic Calculations

This bizarre and terrifying document asserts Europe faces “civilizational erasure” due to Muslim migration. It includes only one reference of the UK, found on a suggestion that Donald Trump’s administration may interfere in British politics to foster the growth of nationalist movements.

However, instead of deciding that this makes America an undependable ally, ministers is worried that aligning closer with Europe could upset the global balance by endangering precarious American backing for Ukraine, Nato and much more besides.

Succession Chatter and The Ghost from the Past

This situation brings us back to 2018. The PM has consistently stated his speech was not an attempt for the leadership but simply an attempt to preserve the “option” of remain in a future vote. In fact, back then, he still supported a “bespoke customs union deal” similar to the one he now appears to be opposing.

But it’s not been lost on Downing Street have noticed that the Health Secretary, widely considered would be a candidate in any leadership election, is part of a clutch of cabinet ministers letting it be known they want to go further regarding the EU.

Staff for the Deputy Prime Minister, another probable runner in a future race for the top job, insist she won’t discuss her position on a customs union as it would merely “escalate unhelpful speculation”.

The Obvious Risk & A Prudent Reminder

The risk is clear. If Starmer rules out more meaningful steps towards a close relationship, he allows rivals to occupy the space where the overwhelming majority of the party's supporters are to be found.

It would be prudent of him to recall the impact just a few words had on his career seven years ago. There are options for a major proposal on EU relations which the PM ought to consider; he should prise them open himself, before someone else makes them his – or her – own.

By

Daniel Villanueva

Financial analyst specializing in precious metals with over a decade of market experience.

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