Newsletter #34: Keir Starmer's big EU reset

PLUS: Local elections preview

Good morning.

Today, in our main billing, we give readers a preview of the upcoming local elections and the Runcorn and Helsby by-election. But first: Keir Starmer’s EU reset.

This newsletter’s agenda: Keir Starmer’s big EU reset (free/paid); Local elections preview: Reform momentum likely to continue, at least for now (paid).

Keir Starmer’s big EU reset

Over the last few weeks, Keir Starmer has worked to ‘reset’ our relationship with the European Union. The basic idea seems to be building upon his recent leadership role in dealing with Trump vis-à-vis Ukraine in an attempt to get some kind of improved market access and/or security cooperation. These negotiations have been ongoing in advance of a summit on May 19.

The talks with the European Union have come alongside Rachel Reeves and Pat McFadden somewhat playing down the possibility of a trade deal with the United States. This followed on from reports that the United States was looking for better access for agricultural products, including their infamous chlorinated chicken. This seemingly conflicts with a rumoured desire for regulatory alignment on food with Brussels, something which supermarkets have been lobbying for. This itself, of course, conflicts with the post-Brexit goal of most Tories to pursue independent, and presumably better, regulation (something that has not yet come to fruition).

The general geopolitical strategy of Labour seems to be the one that I would personally attempt to pursue if I had the same hand: good relations with both the European Union and the United States, and an openness to trade with China. Now that we are out of the European Union, hitching our wagons too closely to any individual power obviously makes little sense, and indeed would defeat the supposed point of Brexit, which was supposed to enable trade with the ‘world’. Achieving this is a serious balancing act, and it is doubtful whether any British politician, regardless of party, has the talent and creativity for it.

The problem right now is that it is unclear whether any of the three suitors will actually play ball with Britain, which is very much the junior negotiating partner. Thus far, the EU — and especially Macron — has proved more intransigent than Starmer (I think) would have expected, given the political circumstances. The United States under Trump is, if anything, terminally unreliable, their demands are politically toxic for Labour, and the United States as a whole is in a protectionist mood (despite Trump’s latent Anglophilia and his personal rapport with Starmer). There would inevitably be an attempt to derail any economic rapprochement with China by Parliament’s huge numbers of histrionic China hawks, who have been greatly boosted by the allegations of espionage in the British Steel saga (which the Chinese embassy also furiously objected to) — though Starmer is at least in a good position to just ignore this, given his huge majority and the limited salience of China with the public.

But what is Starmer looking for from the European Union? His apparent goals are:

1. Access for British companies to the EU’s €150bn defence fund.

2. An agreement on the certification of industrial goods.

3. Steps to improve access for tour artists.

4. A deal to combat illegal migration.

The first demand is being treated separately from the last three, and a deal already seems to have been struck. In exchange for access, Britain will be forced to roll over EU fishing rights in British waters until 2029, as well as to pay a fee. Doubtless, there will be outrage over Starmer’s fishing surrender, given the emotional importance the issue held in the Referendum, though he is probably taking the view that most of the affected seats are not winnable in 2029 anyway, and that this is a small price to pay for economically helpful market access for our defence companies. Even more importantly, it is extremely unclear whether the fee will be small or large. As ever, the devil is in the detail.

From what we do know thus far, everything about this part of the deal is rather bizarre, and shows the fundamental lack of seriousness of the European Union on security. Obviously, there is no reason at all that security cooperation should have anything to do with fishing rights, or even economic and regulatory alignment more generally. And, as far as I am aware, the EU literally does not have the physical capacity to remilitarise at the speed they want. Therefore, competition between companies actually should be rather limited, meaning that while I am sure it will dent the profits of European arms companies to an extent, it may not be by as much as would ordinarily be expected, making Macron’s aggressiveness on the topic even less defensible. Given that the target of the remilitarisation is clearly Russia, a country that there is effectively zero chance of any kind of good British relationship with, there are no serious security concerns with British weapons either.

Needless to say, trying to torpedo a deal with Britain — Ukraine’s main international sponsor after the United States — over fishing rights seems utterly absurd given the lofty rhetoric of the EU in recent months. How is Europe serious about supporting Ukraine and combatting Russia if they are intent on locking out one of the continent’s only vaguely serious (with an emphasis on ‘vaguely’) militaries? There has also been a decision to impose quotas on Ukrainian produce in order to keep Polish farmers happy in advance of elections — once again, placing extraordinarily petty, low-level politics above supposedly existential security problems. American diplomats will have been watching this farce closely.

As for the other three demands? The second demand seems certain to be rejected outright, as it would provide privileged EU market access to a country that is not a member state, thus defeating much of the point of the European Union. Those non-members who do have access (i.e., Switzerland and Norway) pay a fee for this privilege, which is almost undoubtedly a red line for the British negotiators, even if this was on the table, which is also questionable. Perhaps the fishermen can be betrayed, but the £350 million cannot, especially in current fiscal conditions.

The third demand is basically inconsequential, apparently a product of lobbying from the music industry, and was presumably put forward so that Starmer could claim to have gotten something done in these talks. The EU has reacted somewhat more positively to this. But who cares?

The fourth demand is also unlikely to get anywhere: why would the EU be interested in helping out Britain on illegal immigration? As we already know from our dealings with France, they want nothing more than to get rid of these people (surprising, given that Jonathan Portes assures us that they are basically gold dust). The purported ‘one in, one out’ deal with France is also pointless, for obvious reasons.

There are a number of key planks to the plan for improved cooperation with the EU. The most prominent has been a ‘youth mobility scheme’, which will entail a reciprocal right of British and EU citizens under the age of thirty to live and work in the other country. The precise character of this scheme has not been announced, though a letter to Nick Thomas-Symonds, the main negotiator on the British side, suggested that these visas would be ‘time-limited’ and ‘subject to a cap’. British negotiators have allegedly pushed to reduce the scale of the proposed scheme, though details remain thin at present.