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  1. The Staggers
18 September 2023

Keir Starmer’s Brexit delusion

It is not possible to achieve a better deal outside of the single market and the customs union.

By Wolfgang Münchau

The big delusion of the UK political establishment before Brexit was that a relationship based on multiple opt-outs was sustainable. As a semi-detached member, Britain never took ownership of European integration. The Remain campaign never knew how to sell membership.

Keir Starmer’s attempt to rewrite the UK-EU relationship is based on a delusion of a similar kind: that it is possible to stay outside the single market and the customs union, and get a better deal. This is a political lie. It will almost certainly be exposed as such. Based on the current polls, Labour has to be regarded as the odds-on favourite to win the next election. Rishi Sunak was a predictably appalling choice for the job of prime minister. I think, however, that the polling gap will narrow as we approach election day as voters focus on policies for housing and transport, which should favour the Tories in suburban and rural areas. We should also remember that the election is still likely to be more than a year off. The Tories will have an opportunity to unpick Labour’s agenda as election day approaches.

Probably the biggest delusion yet to be unpicked is Starmer’s repeated assertion that a better deal with the EU is available. This is simply not true. There was a lot of vindictive commentary from the EU during the entire Brexit process, but the deal that was eventually agreed was a reasonable third-country trade deal. The two big remaining issues at the time have since been resolved: Northern Ireland and Britain’s associate membership of the EU’s Horizon science programme. If your bottom line is that you do not wish to rejoin the single market and the customs union, there really is not a lot more out there.

[See also: What’s behind Labour’s new Brexit position?]

The existing agreement is up for renewal in two years. There will be a new European Commission by then. Germany, France, Italy and the Netherlands are all struggling with their economies, and experiencing political uncertainty. When Starmer calls Boris Johnson’s trade deal too thin, he misjudges what a trade deal with the EU can achieve. 

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Starmer lists the following areas where he believes he could improve on the deal: business, veterinary compliance, professional services, security, innovation, and research. We can’t rule out the EU cooperating on vaccines, for example, or some other limited areas, for which there was no time to reach agreement during the negotiations in 2020. But the reason why trade deals with third countries are thin is because vested interests intervene. Had the trade deal been negotiated over a longer period, it would not have produced a materially different outcome. 

I have been arguing that the EU needs to rethink its third-country relations from the ground up. In particular, it is a good idea to create an outer layer of integration with countries that seek to be members of the single market, but without the monetary union and other joint policies, for example on immigration. But if the UK does not want to join the single market, there is not much the EU can do. 

Here is a scenario for how this can play out. The contradiction of Starmer’s policy on Europe will either become an election theme or it will become apparent once it hits reality. If the EU plays hardball, as it surely will, pressure will grow from inside the Labour Party for another referendum. The only way to do this would be the way David Cameron did this: put it in a manifesto and see whether you get a majority. Cameron did this in 2015, very much to everybody’s surprise, including his own. I would not bet on history repeating itself in the reverse direction. Getting back in is a harder job than getting out. At the very least, you would need somebody who knows what they are doing.

This piece originally ran on Eurointelligence.

[See also: Keir Starmer takes a risk on the US presidential election]

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