The EU is set to offer Labour a reset of post-Brexit relations if Sir Keir Starmer wins the next general election, i has been told.
European leaders are targeting a scheduled 2026 review of the existing UK-EU trade deal as an opportunity to agree a closer trading relationship, which would also boost economic security if Donald Trump returns as US president.
Such an agreement would not involve Britain rejoining the single market or customs union, which Starmer has already ruled out. Instead it would be intended to help businesses import and export goods including food and cars which have been hampered by new trade rules since Brexit.
The Trade and Co-operation Agreement, signed by Boris Johnson in 2020, will be reviewed in two years’ time.
Brussels officials have publicly insisted the review will be only a technical process to ensure the existing agreement is working properly. But privately, representatives of both individual member states and the EU’s central institutions have told Labour they are open to a more ambitious negotiation.
This could include joint regulations on issues such as safety standards for automotive manufacturers, health checks on food and plant products, and cross-border trading of financial services. The move would be welcomed by many businesses, but risks allegations from Brexiteers that Britain is outsourcing some laws to Brussels.
One senior European diplomat said: “The 2026 review of the Trade and Co-operation Agreement is a big opportunity for Starmer, potentially. If they decide to leave it to the bureaucracy, it will be very technical. But if there is political will to make real changes to the relationship then that will be extremely significant. It all depends on the political momentum of a new government.”
Another EU source said: “The potential future government of this country is looking at ways through which it can get closer rather than further away from Europe – especially in a geopolitical context that will most likely change a lot internationally, if Trump as it seems likely will be in the White House.
“If, as [shadow Chencellor] Rachel Reeves says, growth is the answer to the current economic malaise of the UK, to grow you need better trade relations with the EU. It is half of this country’s trade, so it is the easy way to improve the economic situation significantly.”
The source suggested Britain and the EU could strike a deal on financial services as well as the imports of live animals, but warned: “I don’t think we’re there yet, there are a lots of ifs and buts.”
In September last year Starmer said he would seek closer ties with Europe if elected, but ruled out reversing Brexit.
Nick Thomas-Symonds, Labour’s shadow Cabinet Office minister, said: “The Labour Party wants to make Brexit work. We would aim to improve the UK’s trade and investment relationship with Europe, including trying to negotiate a veterinary agreement to help tackle food inflation.
“With war in Europe and increasing threats, Labour would seek to strike UK-EU defence and security pact to complement Nato and strengthen European security, as well as better co-ordination of policing to smash criminal people smuggling gangs. This would be within the Labour Party’s clear red lines, of no return to the customs union, the single market or freedom of movement.
“An incoming Labour government will reset relations with key European allies. The wider Trade and Co-operation Agreement review could provide an opportunity to address some of the shortcomings in the Conservatives’ deal.”
A senior Labour insider added: “The main thing that businesses are asking for is stability and continuity, and a government that won’t try and pick fights.”
They insisted that in government, Labour would not seek to diverge from EU regulations for the sake of it, saying: “The possibility of future divergence can be a real worry. For example, if you’re an auto manufacturer then your major market is the EU and your main concerns are things like safety standards which there’s no reason to change.”
How the Brexit trade deal works
Britain’s relations with the EU since Brexit are governed by the Trade and Co-operation Agreement (TCA), which was agreed between Boris Johnson’s government and the European Commission on Christmas Eve 2020, coming into effect six days later.
Its arrangements to avoid a hard border on the island of Ireland, known as the Northern Ireland Protocol, were later superseded by the Windsor Framework that Rishi Sunak negotiated last year.
The core of the TCA is a trade agreement which ensures that there are no tariffs and zero quotas on goods passing between the UK and the EU that comply with the agreed rules of origin.
The deal also contains provisions on other issues including fishing, data-sharing and travel – introducing rules that allow tourists to travel to the continent with ease, but make it much harder to settle there than it was before Brexit.
Some classes of goods face major regulatory restrictions: for example, raw unfrozen meat cannot be transported into the EU, and it is now extremely difficult to send live plants to the continent.
Businesses have complained about the need to fill out customs declarations and other paperwork when they export to the EU. It is also harder for some professionals to work in EU countries because their British qualifications are not automatically recognised.
Economists believe that leaving the EU has made the UK’s GDP to grow more slowly than it would have done, but it is hard to discern the precise effect because of the impact of Covid and the global inflation crisis that followed.
David Lammy, the shadow Foreign Secretary, was a fervent anti-Brexit campaigner but said recently that Britain would not rejoin the EU “for my political lifetime”.
Scottish Labour, Welsh Labour and some activists have sought to push Starmer into a more pro-EU position. Jeremy Miles, one of the two candidates to be the next leader of Welsh Labour, has said the UK should sign up to the single market, while Scottish Labour is committed to eventually rejoining the EU.
Anand Menon, director of UK in a Changing Europe, warned that a Labour government would need to offer the EU an arrangement that would benefit them, such as co-operation over security, in order to get anything in return. He said: “It would have to be quite an ambitious agenda for it to interest them, because they have got so much other stuff at the moment.”
