Labour threat to Brexit exposed as bid for closer EU ties risks UK becoming a 'rule taker'

Labour's threat to Brexit has been exposed as Sir Keir Starmer's party looks poised to turn the UK into a "rule-taker" by seeking closer ties to the European Union.

The party insisted ahead of the July 4 General Election it would not seek to reverse Britain's exit from the bloc or to rejoin the customs union or single market.

Sir Keir has said there is no case to rejoin and maintained the UK would not have rules dictated to it by Brussels, but he also said he doesn't want to diverge from the EU or lower green, labour or food standards.

His assurances came before Prime Minister Rishi Sunak announced the date of the General Election, but neither Brexit nor international trade policy appear to be high priorities in the two main parties' campaigns. This is despite the issue dominating the 2019 election when Boris Johnson secured an 80-seat majority on the back of his pledge to "get Brexit done".

Matthew Lesh, Director of Public Policy and Communications at the Institute for Economic Affairs, told Express.co.uk that Labour's desire to bolster ties to the EU risks losing some of Britain's Brexit benefits.

He said: "Labour have indicated a preference to strengthen relations with the EU and reduce post-Brexit burdens on trade. But, as the EU have repeatedly signalled, the removal of barriers like customs checks will require closer alignment with EU rules. This could even mean so-called 'dynamic alignment,' meaning UK laws are updated to follow EU changes.

"This would be the worst of both worlds: the UK required to follow EU rules without any formal say in their creation. It could even mean the loss of any potential regulatory benefits of Brexit, like cresting a more hospitable environment for innovative new technologies."

The expert at the right wing, free market think tank said that compared to Labour, the Conservatives are likely to keep close to the status quo in terms of UK-EU relations post-July 4.

Stephen Hunsaker, Trade and Economics Researcher at UK in a Changing Europe, told Express.co.uk the status quo set by the Tories would not prevail if Labour was to form the next government.

The think tank recently published a report which found Brexit was hitting UK trade, but that Britain's services trade with the bloc has proven to be "more resilient" than anticipated.

Mr Hunsaker said if Labour wins power the possibility of a dramatic change in the UK-EU trade relationship is unlikely. He added: "They will likely tinker with the edges of the TCA (Trade and Cooperation Agreement) and look at more regulatory alignment with the EU to smooth trade flows, but it is extremely unlikely the UK will be able to make any changes that would have a similar effect to rejoining the single market and customs union."

The TCA is a free trade deal between the EU, the European Atomic Energy Community, and the UK. It is due to be reviewed in 2026.

UK in a Changing Europe's expert said the Tories' focus on free trade agreements and exploiting opportunities to create divergence over regulations to differentiate Britain from the EU for countries outside the bloc will not prevail if Labour wins the election.

He argued a Labour government would deprioritise quickly signing free trade deals and instead want to quietly draw closer to the EU as it remains the UK's largest trading partner. He added: "However, without membership in the single market, those changes will not bring about dramatic changes."

Experts at the UK Trade Policy Observatory (UKTPO) based at the University of Sussex Business School recently accused both Labour and the Conservatives of failing to articulate or even mention their policies on international trade during the campaigning.

UKTPO described this as a mistake given how international trade supports more than six million jobs in Britain, spurs innovation and improves consumer choices.

Michael Gasiorek, Professor of Economics at the University of Sussex, told Express.co.uk that if Labour wins the election, then pressure will grow on the party to join the single market or customs union.

He said: "Labour is clear that it wishes to increase integration, but not by much. They have explicitly ruled out rejoining the customs union or the single market and have rejected the notion of being 'rules takers'.

"However, given the challenges of fostering growth without spending money and the costs to firms of the UK gradually diverging from the EU as the latter updates its regulations, the pressure to reconsider that position is likely to grow and by the next election seeking to join one or the other may become policy."

Professor Gasiorek added that Labour's wish to pursue agreements with the EU over checks on plants and animals crossing the border, security and defence ties as well as possible mutual recognition of professional qualifications may not be easy or speedy.

He said one important area likely to be beneficial economically, but where Labour has remained tight lipped, is on aligning climate policies with the EU, in particular the Emissions Trading Scheme and the Carbon Border Adjustment Mechanism, a carbon tariff on products such as steel, cement and electricity.

The Director of Sussex's Centre for Inclusive Trade Policy also said if the Conservatives were to win the election it would be seen as a vindication of Brexit and the Government's reluctance to engage closely with the EU.

He added: "In that outcome there is little likelihood of much change in policy regarding the UK-EU trade relationship. The pressures pushing Labour towards deeper integration, however, may also apply to the Tories and so we could see them creeping closer. The EU, however, does not think much of the UK as a partner and so will take some persuading to offer much.

"A Tory loss would likely see a change of leader and it looks more likely, if anything, that any new leader would be further to the right than Rishi Sunak and probably even less keen on deepening relations with the EU. This is likely to reinforce the current policy stance which is to limit any closer integration."

Dr Peter Holmes, Emeritus Fellow at UKTPO told Express.co.uk that if Labour form the next government, then Sir Keir would be under pressure to satisfy pro-EU backbenchers' demands, but also risks disappointing the public if deals with the EU fail to deliver economic growth.

He said: "International businesses are wary of investing in the UK because they don't know what the border regime will be. It's a fine line. If [Starmer] puts off making deals investors will be wary of investing, so slowing growth.

"But if he does do deals and they don't deliver results, people could be disappointed by that as well."