Starmer set to signal path to an even softer Brexit

Any speech would be viewed as a response to rising pressure Starmer could face over Brexit as Labour deals with the fallout of local election losses, particularly to the Greens, and how to reunite the party’s centre-left voter coalition.

Despite wider Cabinet discussions on the long-term future of the EU relationship and whether Starmer needs to adopt a radically more pro-Brussels stance, his possible intervention is likely to focus on his existing strategy and potentially expanding proposals for more alignment with the single market.

The PM would likely set out the trade-offs inherent in the reset. The UK is currently negotiating with the EU to follow Brussels rules on food and drink trade, electricity and carbon taxes in return for single market access. He may also argue that while there will be winners and losers, his approach will be good for the British economy and businesses.

It comes with the EU demanding the UK regularly pays into the Brussels budget as the price of single market access, with some estimates suggesting this could be around £1bn a year, and asking Starmer for a youth mobility deal to allow under-30s to move more freely between both sides with no hard cap on numbers and lower university tuition fees for Europeans in Britain.

Starmer may also use any speech to unveil more details of how the UK wants to go further in aligning with EU rules in more economic sectors – with industry pushing for chemicals, cars, and pharmaceuticals – to get single market access for more British businesses than those covered by the food and energy deals.

Officials in the Cabinet Office have for months been working up a plan for further alignment, an approach endorsed by Chancellor Rachel Reeves in March when she cited a study suggesting Brexit had caused an 8 per cent hit to the economy.

But the likelihood of Starmer announcing more details would depend on whether these new ambitions have been discussed with Brussels in advance and their response.

The Government is understood to to be eyeing up a number of “quick wins” as part of a new offering to the electorate. Regulatory reform is one area the Government has been keen to implement in order to boost growth.

Starmer sticking to Brexit ‘red lines’

There are growing discussions within the highest levels of the Labour Party about whether new ambition is needed, particularly in light of dire poll ratings, but Starmer will stick to his red lines – that the UK will not rejoin the single market or customs union or return to free movement of people under his Government.

Nevertheless, there are discussions under way at the heart of Government about the UK’s long-term relationship with the EU following calls by senior Labour figures and business leaders to rejoin the bloc.

One Cabinet minister said: “None of the red lines in the manifesto [on this issue] are about to be ripped up but if you are asking whether there are big conversations going on about where the country might be in 10 or 15 years time then the answer is yes.

“You cannot drive a car on a journey with every twist and turn and expect to end up at a particular destination unless you know what that destination is.”

EU won’t give ‘something for nothing’

Appearing to break with the strategy to ride “three horses” regarding trade ties with the US, the EU, and China, the Cabinet source added that there is an acknowledgement that the “primary” relationship for the UK was with Brussels.

However, they also said that the Government was not “naive” enough to think the EU would give the UK “something for nothing” and that it would take “time to negotiate change.”

Meanwhile, a Government source warned they were expecting critics of the PM to reach for the “easy option” of pushing for closer EU ties after the local elections, but that demands may not be “realistic or deliverable”, and may not win back Green voters who have deserted the party over issues like migration and Gaza.

Senior Labour figures have told The i Paper that any policy reset, which is expected in the days following the local election results, must include looking at rejoining the EU. A recent YouGov poll suggested this would be backed by 53 per cent of the public with only 32 per cent opposed, with a vast majority of Labour, Green and Liberal Democrat voters favouring a reversal of Brexit.

One source said: “One of the only things that would help us rebuild the economy and the kind of coalition we would need to win the next election would be a promise to hold another vote on whether to rejoin the EU.”

‘Rejoining EU won’t fix all of the country’s problems’

It is understood that several Cabinet ministers back ex-Labour leader Lord Kinnock’s view that Brexit has inflicted “serious harm” on Britain.

However Peter Kyle, the Business Secretary cautioned against thinking that rejoining the EU would fix all the country’s problems.

He told The i Paper: “During the Brexit era, Brexiteers blamed every problem on the EU.

“We should not fall into the same trap and think that all our problems will be solved by rejoining the EU.”

Any leadership debate likely to be ‘dominated’ by EU pledges

Brexit expert Anand Menon said any leadership contest to replace Starmer is likely to be “dominated” by pledges to get closer to the EU “because that is where the [party] members are” who will potentially decide the new leader.

Meanwhile, the Labour Movement for Europe (LME), a grouping of dozens of MPs, is to launch a bid to amend the Brexit Bill to be announced in next week’s King’s Speech.

It is understood that the LME is planning to push for amendments to the bill to boost British workers’ rights via adopting a narrow set of EU regulations and to bolster the power of MPs to oversee the reset in Parliament, likely through a new select committee.

LME chair Stella Creasy told The i Paper: “Both the public and parliamentarians have not been part of the reset, that has to change.”

Tom Bruffato, policy director at the pro-EU Best for Britain campaign group, said the logic of Starmer’s Brexit reset approach would inevitably lead to a discussion on rejoining.

“Ultimately it gets tougher from now on: the incrementalist approach will be running its course and that means that you are going to have to look at the red lines,” he told The i Paper.

“When you do, advocating for a customs union or single market, or a version of Switzerland, is not really going to work for you, your party or the country, because you won’t be able to carry the persuadable middle [of voters] with you.

“If you look at the red lines, which is what you’re going to have to do, you need to push for the UK’s full EU membership, because that’s how the public actually comes out and thanks you for it.”

The mooted EU speech from Starmer will come after the PM’s planned major policy speech next week which is likely to focus on regulatory reform and boosting the economy.