Closer ties with the EU single market are preferable to a customs union, Keir Starmer has said, in his clearest sign yet that the government is seeking to further deepen links with Brussels.
The prime minister said the UK should consider “even closer alignment” with the single market. “If it’s in our national interest … then we should consider that, we should go that far,” he told the BBC’s Laura Kuenssberg.
In a riposte to some cabinet colleagues who have suggested the UK should seek to form a customs union with the EU, Starmer said he did not think that was the answer. “We are better looking to the single market rather than the customs union for our further alignment,” he said.
The health secretary, Wes Streeting, and the justice secretary, David Lammy, have both suggested the UK could get economic benefits from a new customs deal – as has the TUC general secretary, Paul Nowak.
Starmer’s comments, which suggest the UK could explore further sectors for dynamic alignment beyond the food and drink deal agreed in May, drew immediate angry reactions from Reform UK and the Conservatives.
The prime minister said that much had changed in the last few years, including the signing of new trade deals under Labour. “I argued for a customs union for many years with the EU, but a lot of water has now gone under the bridge,” he said.
“I do understand why people are saying: ‘Wouldn’t it be better to go to the customs union?’ I actually think that now we’ve done deals with the US which are in our national interest, now we’ve done deals with India which are in our national interest, we are better looking to the single market rather than the customs union for our further alignment.”
The government has made slow progress on the most recently announced deal with Brussels and has pulled out of plans to enter a multi-billion EU defence fund. Negotiations over the new food and drink (SPS) agreement announced in May, as well as a youth mobility programme, are continuing but with several significant points of dispute.
Any further alignment with the EU is likely to come with a further Brussels demand for relaxation of migration restrictions. Starmer said there would be no return to full freedom of movement rights as part of any future negotiations, but defended the deal for a youth mobility scheme.
“We are looking at a youth mobility scheme which will be for young people to travel, to work, to enjoy themselves in different European countries, to have that experience.”
The shadow foreign secretary, Priti Patel, called the remarks a “Brexit betrayal” and said Starmer was “surrendering our freedom to cut regulation and strike our own trade deals”.
The leader of Reform UK, Nigel Farage, said Starmer’s comments were “a breach of good faith with Labour voters” and criticised the co-operation with the EU on energy markets that is being explored, saying it would tie the UK to “crazy EU net zero policies and carbon taxes”.
The battle over closer ties with Europe is likely to be a key dividing line that Labour seeks to draw with Reform. A Labour source said: “Nigel Farage’s biggest weakness is his militant opposition to any relationship with Europe. Couple that with anything to do with clean energy and you can see how he has wound himself up today.
“But it comes from something much more sinister, too. He doesn’t want British businesses to find things easier. He doesn’t want bills to come down. If Britain struggles, that fuels his politics of division.”
Starmer has given hints in recent months he would like to revisit strengthening ties with the EU. In November, Nick Thomas-Symonds, the minister in charge of EU negotiations, was promoted to full cabinet rank.
Minouche Shafik, the prime minister’s economic adviser, is among those close to Starmer who have suggested internally that returning to the customs union could be one of the most effective ways of generating growth.
But Starmer himself has been more reticent, having signed numerous international trade deals while in office including with India and an economic agreement with the US, which he has been able to tout as some of his successes.
Backbench pressure has been growing within the Labour party, with 13 of its MPs backing a Liberal Democrat proposal to join a customs union in a Commons vote last month.
The intervention from Streeting in an Observer interview late last year that a customs union would bring “enormous economic benefits” was widely seen as a challenge to Starmer amid speculation over the prime minister’s future.
In his interview with the BBC, Starmer warned his internal rivals they would be opening the door to a government led by Nigel Farage if they recreated the “chaos” of the Tory leadership battles.
“What I don’t think will help us is if a Labour government turns back to the chaos of the last Tory government. That would gift Nigel Farage,” he said.
He said he believed Labour could still win the next election – and said he would be judged at that moment: “I was elected on a five-year mandate to change this country. I intend to deliver on that mandate. I will be judged at the next general election on whether we have brought about the change that people voted for.”
Starmer said the next election would be “unlike any election we’ve seen in this country for a very, very long time”.
“Because my strong view is it’ll be a Labour government up against a very rightwing proposition in Reform,” he said. “And that Reform proposition will be a proposition of toxic divide of this country. The next election is going to be about a question of, what is it to be British? And I believe to be British is to be compassionate, reasonable, live and let live, and diverse.”
