With every erratic move Donald Trump makes, from threatening tariffs on Nato allies to publicly attacking Keir Starmer in overnight blind sides on Truth Social, there are some in Labour who see it as a vindication. They have been arguing for months: the UK can no longer depend on its unpredictable American counterpart, and must pivot towards Europe.
“Keir and Rachel want to prioritise living standards and growth,” a Labour insider notes. “But the little growth there is could be wiped out by the US with the click of Trump’s fingers.” Many inside Labour are turning towards Europe, the only relationship they believe can reliably provide growth. Some see the pivot already beginning, though other senior figures close to Starmer remain resistant. A battle is now under way between these camps, pulling Starmer in different directions.
Having tried to bury Brexit throughout Keir Starmer’s leadership, Labour is making less effort to repress its instinctive Europhilia. Wes Streeting, the Health Secretary, and David Lammy, the Deputy Prime Minister, have both publicly suggested the UK could get economic benefits from rejoining a customs union. Labour MPs are mobilising via the Labour Movement for Europe grouping, and pressure is coming from outside, too, from the Greens, Liberal Democrats and the TUC.
“This is where the Labour Party is,” an insider says. “The question is, does Keir get ahead of it?” If he doesn’t, this insider adds, he will arrive there anyway and look like he’s been dragged there by his party – the worst of all worlds. Europe would certainly be an issue in any future leadership contest, and Streeting, a likely contender, has already indicated his support for a customs union.
Should a leadership election come, many – including those close to Starmer – expect a competition of pro-Europeanism. “I can imagine a situation where everyone in a leadership contest endorses rejoining a customs union to cancel it out as a threat,” one insider observes. “At the next election Labour will be more pro-European, whether Keir is part of that or not,” another says.
A key signal on Labour’s changing position on this issue came with Starmer’s new-year interview on the BBC. “We are better looking to the single market rather than the customs union for our further alignment,” he told Laura Kuenssberg. (In simple terms, the customs union sets the terms of trade between its members and the rest of the world. The single market allows the free flow of goods and services between its members.) It was decried as a “Brexit betrayal” in the right-wing press. Advisers scrambled to insist there was no change in position. “It’s the argument we’ve always made, for alignment with parts of the single market,” says one influential aide. Labour’s manifesto stated it would pursue a better Brexit deal, with “red lines” – no rejoining customs union, no freedom of movement – that Starmer restated in his interview. The food and drink deal that is currently under negotiation was never going to be the sum total of Labour’s ambition, the aide says.
Yet Starmer’s wording was no accident. The PM and his advisers had planned the line in advance. “It shoots the fox that is Wes Streeting,” one person involved says. Starmer argued the single market, rather than a customs union, would provide greater economic dividends, especially given the UK has now signed trade deals with the US and India. It was markedly more pro-European in tone. But some close to Starmer argue he was going even further than that. “He was deliberately opening the door to a different approach,” one close ally tells me. They believe he was consciously opening up the option of rejoining the single market, despite later denials. It was “classic Keir”, that ally laments. “He took one and a half steps forward, then one step back. He opens the door and doesn’t walk through it.”
Once again, Starmer finds himself in a situation where the people around him take different views, each insisting that they know where his instincts truly lie. “I think this is what Keir believes in his heart of hearts,” argues one figure who favours a bolder move towards Europe. “It’s like the two-child benefit cap. But as always it will take him a while to get there.” They expect Starmer will move “crab-like” towards a more pro-European position. “It’s just important to get there before you look like you’ve been dragged there.”
“Crab-like” could well result in the Swiss-style arrangement that Labour MPs are now quietly getting excited about in Westminster. The Labour Movement for Europe recently circulated a paper calling on the party to “think Swiss” with sector-by-sector deals. “It suits his incrementalist nature, getting deals here and there,” one Labour figure observes. “Before long you’re in a place where you’ve got a 100 or so deals.”
And yet, many within Labour don’t just want the government quietly to pursue ever-tighter economic alignment with Europe: they want Labour to shout about it. “If you’re going to unite the left at the next election, you’ve got to have a bolder offer on Europe,” argues one insider. Several figures around the cabinet table share this analysis that, whether Labour likes it or not, voters tack left or right depending on past Brexit alignments. They argue that Labour’s vote share is going down dramatically among those previously Remain voters, and a pivot towards Europe is Labour’s route to getting them back.
Some in No 10 have serious concerns about this sudden pro-European clamour. “We need to pursue an argument about why what we are doing is good, based on tangible differences we will make to working people’s lives – not just vibes or old-world arguments,” one insider says. Senior figures are concerned about alienating parts of Labour’s voter coalition from 2024.
Some of those behind the pro-Europe push inside government see themselves as at odds with those they term “America First realists”. They describe this category, exemplified by the deputy US ambassador James Roscoe and the Prime Minister’s business adviser, Varun Chandra, as “not Labour people”: less political, and focused on maintaining the special relationship at all costs. The “European realists”, who see themselves as “more Labour” and “more political”, say the team around Starmer that is managing the Trump relationship have become “blinkered”.
“Our approach has been to seek deals with Trump’s courtiers,” explains one critic of the current strategy. “But we are learning the hard way these courtiers don’t always speak for the emperor, nor guarantee what we agree will even stick.” Although this influential adviser argues that it would be “idiocy” to stop working with the Americans, Trump’s actions meant it was now imperative that Britain began building something serious with Europe.
Those at the heart of Downing Street’s approach to the Trump administration find this an “odd” argument, however. “It doesn’t require a pivot. Keir’s already looking both ways,” a No 10 insider says. Chandra, who negotiated much of last year’s US trade deal, sees no contradiction between pushing for a deeper economic relationship with Europe and pursuing even deeper ties with America, the fastest-growing economy in the world.
Inside Downing Street, the focus is on using their diplomatic relationships with European capitals and Trump’s Washington to de-escalate the current crisis. That was typified by the flurry of activity that took place in Downing Street on 18 January, as Starmer and his closest team of advisers hunkered down in No 10 for calls with European leaders – including Mette Frederiksen, the Danish prime minister, who was “tearing her hair out” – and Trump. Chandra has developed particularly good relationships with Stephen Miller, US homeland security adviser, and Howard Lutnick, US secretary of commerce, while Jonathan Powell is seen as close to the US ambassador to the United Nations and former national security adviser, Mike Waltz.
“We have spent hours and hours on the phone with the administration,” insiders say of the time they have invested in their relationships with the Trump team. “We have those relationships so we can have those difficult conversations.” And yet, with a single Trump post, months – or even years – of diplomatic negotiation can be for nothing.
Whatever grand plans exist in No 10 and beyond, Starmer may yet be forced to choose between Europe and the US, should Trump pursue his claim on Greenland. At this point, the question will not be whether to join a customs union with the EU – or return to the single market – but whether to join the EU in retaliating against American economic pressure by levying retaliatory tariffs against Washington in return.
“I think Keir’s thinking about it,” a pro-European Labour figure says. Others aren’t convinced. “I can’t see Varun giving the go-ahead to tariffs on the US,” counters another. For now, the Downing Street line is that it’s “hypothetical”. As one No 10 insider puts it, by the time it gets to that point, both options are bad economically. They say it would ultimately be a political choice for Starmer about what message he sends and how he maximises his leverage rather than about the economic impact.
“Europe is divided on whether to dial up or down the rhetoric on tariffs,” they add. “It is divided on how we approach this. But we are in agreement on our red lines on Greenland. The rest is tactics and negotiation.” No 10 still doubts Trump plans military intervention in Greenland. Influential figures were even making the argument internally that his broadside against Starmer’s Chagos deal was designed to cover the opening moves of a retreat on the annexation of Danish territory. Calmer heads internally also stress that there are two weeks until Trump’s tariffs are due to be imposed. Until then, Starmer and his team are determined to keep talking to the Trump team, even as those conversations become ever more strained, and the voices inside Labour urging a pro-European pivot get louder. Whether No 10’s sanguine analysis proves wise or not, one thing is clear: Europe is back, and ready to make the weather of British politics once again.
[Further reading: The battle for Labour’s leadership has already started]
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This article appears in the 21 Jan 2026 issue of the New Statesman, Europe is back
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Subscribe here to commentSome, possibly a majority in Labour, have seized on a customs union with the EU as an economic and political panacea, without any informed debate as to whether it would be either. There are all kinds of agendas here, but no real thought as to its real effect, all focus being on whether it would smooth trade with EU countries – it would – but would have wider consequences which might not be positive in undermining relations with the rest of the world. Further, why would we choose to harm trade and wider relations with the US, the biggest national market, to make a political point? Its sad to say all our choices are awkward ones here, and the government’s undramatic approach certainly the right one.
The way the right is going there must surely be some more moderate Tory votes to be picked up by Labour – perhaps particularly from the business community so damaged by Brexit (and exacerbated if Trump’s tariffs arrive)but perhaps also in that Labour could well appear as the only effective “sane/moderate” option to the many voters fearful of virtually every other option on offer.
With or without Trump, America is going to be refocusing on the Indo Pacific region, and the old days of the Trans Atlantic alliance are over. The sooner our politicians reconcile themselves to that fact, the better. Britain’s future lies where geography would suggest, and that is with Europe. We cannot forever go on trying to face both ways at once, and it is about time people stopped being scared of the dwindling band of Brexiteers.
The most visible thing about Switzerland’s relationship with the EU is that Swiss people travel freely between Switzerland and EU countries doing their shopping at much lower prices than if confined to Switzerland.