Prime Minister Keir Starmer has ruled out taking Britain back into an EU customs union, warning that such a move would “unravel” the post-Brexit trade agreements the UK has struck with countries including the United States and India.
Answering questions in the House of Commons, Starmer said a customs union “isn’t a sensible way forward” because it would require the UK to adopt the European Union’s common external tariff and hand back control over trade policy, undermining recent agreements that have cut tariffs for key British exporters.
His comments amount to a clear restatement of Labour’s Brexit “red lines” – no return to the EU, the single market or a customs union – and come amid growing pressure from pro-EU voices in Westminster and within government to consider closer economic integration with the bloc as a way to boost growth.
Starmer told MPs that rejoining a customs union would jeopardise the government’s flagship trade deals, which he has held up as evidence that “Britain is back on the world stage” after years of Brexit turmoil. He singled out the automotive and pharmaceuticals sectors, arguing it would not be “fair” to firms that had just secured improved access to the US and Indian markets.
Under a full customs union, the UK would be obliged to align its external tariffs with those set in Brussels. Trade agreements with third countries are negotiated exclusively by the EU, leaving member states and customs union participants unable to offer bespoke tariff cuts or market access. Starmer argued that this would force Britain to revisit or rework agreements negotiated on the basis of its independent tariff regime.
The government’s newly signed free trade agreement with India, concluded earlier this year, is billed as the UK’s largest post-Brexit bilateral deal. According to official estimates, it is expected to increase UK GDP by about £4.8bn a year in the long run, raise wages by £2.2bn and boost bilateral trade by £25.5bn. Indian tariffs on UK cars are due to fall from more than 100 per cent to 10 per cent within agreed quotas, while duties on whisky and gin are set to drop from 150 per cent to 40 per cent over a decade.
A separate UK–US trade agreement that entered into force in June has removed or reduced tariffs on British automotive and aerospace exports, with ministers claiming it will safeguard “hundreds of thousands” of manufacturing jobs. In the pharmaceuticals sector, a new understanding with Washington announced this week effectively locks in tariff-free access for UK medicines and medical devices in return for changes to the NHS medicines rebate regime, cutting the rate from 22.5 per cent this year to 14.5 per cent in 2026, capped at 15 per cent.
Starmer’s warning is also calibrated to counter mounting political and economic arguments for a customs union. The Liberal Democrats, who forced a symbolic Commons vote on the issue this week, have made a new UK–EU customs union their flagship Brexit policy. Party leader Sir Ed Davey has called it “the single biggest thing we can do to turbocharge our economy in the medium and long term” and wants negotiations to start with a view to implementation by 2030.
The Lib Dem motion to allow debate on a backbench bill mandating customs union talks scraped through the Commons on Tuesday by 100 votes to 100, carried only by the Deputy Speaker’s casting vote. Although the legislation has little prospect of becoming law, the vote underlined the political sensitivity of the issue for Labour, which faces pressure from both pro-EU voters and those determined not to reopen the Brexit question.
Inside No 10, the customs union option has been discussed as a possible lever to lift Britain’s weak growth rate, according to officials cited in recent reports. Ministers have been briefed on House of Commons analysis suggesting that joining a customs union could raise GDP by around 2.2 per cent, making it one of the few large-scale policy changes with a measurable impact this parliament. Some cabinet figures have privately described it as “the only idea around” capable of delivering a step change in growth.
Other senior ministers and advisers, however, are understood to share Starmer’s concern that surrendering control over tariffs would mean unpicking the government’s recent trade “hat-trick” with the EU, India and the US, and might not be matched by a willingness in Brussels to reopen such a fundamental question so soon after the May “reset” agreement.
Instead, Starmer has committed to a sector-by-sector approach to improving relations with the EU while staying outside its core economic institutions. The reset deal agreed in May deepened co-operation on food and agricultural standards to reduce border checks, granted long-term reciprocal access to fishing waters for 12 years and opened the door for UK participation in a €150bn EU defence rearmament programme.
British officials are also seeking further arrangements on sanitary and phytosanitary (SPS) rules, energy market links, youth mobility and law enforcement data-sharing, as well as closer alignment on emissions trading. Ministers insist these steps can ease post-Brexit frictions and support growth without re-entering the single market or customs union, and without restoring freedom of movement.
Starmer has repeatedly said since 2024 that he does not intend to reopen the core terms of Brexit, arguing that another fundamental renegotiation would risk renewed political “turmoil”. His stance marks a shift from his position as shadow Brexit secretary in 2018, when he was one of Labour’s strongest advocates for a customs union with the EU.
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