Conscious recoupling: Starmer and Europe need each other more than ever

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Keir Starmer wants an update to last year’s EU-UK reset that would not take Britain into a new customs union but could, in parts of the economy, start to resemble the EU single market.

So what? His career depends on the distinction and the future of the country may do too. A strengthened EU-UK relationship has become Britain’s last best hope for growth, as an essential corollary to its increasingly fraught relationship with the US. So, after a week of all-consuming international fireworks, the PM is trying to focus on the closest thing he has to a big project for 2026: a bill to redefine EU relations and in the process

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  deliver meaningful economic expansion;

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  outflank pro-Europeans like Wes Streeting who want his job; and

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  bring the phrase “dynamic alignment” into common English usage.

He sees you, Wes. The new Labour contest to demonstrate creative thinking on fixing Brexit follows a campaign and 18 months in power in which loose talk on Europe was taboo. It was triggered by Streeting’s nod in an Observer interview last month to Brexit’s “massive economic hit” to the UK economy. Streeting came close to calling for a new customs union as the solution.

And he raises you. Starmer’s response – after a walk round Chequers with his Europe minister, Nick Thomas-Symonds, and a contemplative Christmas – has been to tell the BBC he wants closer alignment with the EU on a sector-by-sector, “issue-by-issue”, basis.

So, not a customs union? Correct. Downing Street outriders say even a bespoke customs union would jeopardise post-Brexit trade deals with India and the US, whereas, as one put it yesterday, “dynamic alignment gives you more bang for your euro”.

How it works. Dynamic alignment on the Swiss model would require the UK to automatically accept new EU laws and regulations in agreed sectors and make multibillion-pound financial contributions to the single market. In principle it delivers radically smoother trade and ends the need for political squabbling each time a new regulation is adopted.

What’s next. Agrifoods, electricity and emissions trading are already on the list for alignment, but without a longer list that would only deliver an estimated 0.4% (£9bn a year) boost to GDP by 2040. Obstacles include

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  Starmer’s caution, fuelled by lingering fear of abandonment by Labour “leavers” and a newer fear of angering Donald Trump, who loathes the EU;

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  Europe’s reluctance to re-engage with a UK it knows could soon be run by Nigel Farage, who yesterday confirmed he would tear up any deals reached by Starmer and refuse to pay compensation;

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  free movement of people, which remains a red line for Starmer but which Switzerland has had to accept, albeit with an emergency brake, as part of its dynamic alignment deal; and

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  cost, because the £570m the EU extracted from London for a year’s membership of the Erasmus student exchange programme suggests dynamic alignment won’t come cheap.

Obstacles, schmobstacles. Starmer’s allies and pro-Europeans generally say the stakes are too high to do the reset by halves. One source close to the PM says that the first step, before any alignment bill comes to parliament, has to be a youth mobility scheme that lets up to 100,000 young Europeans live and work in the UK (and vice versa) for limited periods – and, more importantly, that builds trust in Brussels where the idea is popular.

Step two is to acknowledge that the rewards of alignment, including an estimated 22% uptick in UK-EU agrifoods exports alone, should outweigh any political cost.

Step three is to seize the moment. Nick Harvey, CEO of the European Movement, insists there’s an opportunity for a big alignment bill covering multiple sectors without the usual complaints of British cherry-picking, provided nothing is announced unilaterally and Thomas-Symonds devotes sufficient time to pitch-rolling in Brussels.

What’s more… Geopolitics demands nothing less, for as long as Greenland is threatened by the US, Nato is adrift and European solidarity is at a premium.

Photograph by Antoine Gyori/Corbis via Getty Images