Starmer under pressure from biggest backers to unpick Brexit after Trump tariffs

Independent

05-04-2025

Labour's biggest financial backers are among the loudest voices pressing Sir Keir Starmer to have a much more ambitious approach to his Brexit reset in the wake of Donald Trump unleashing an international trade war by imposing sweeping tariffs.
Trade unions, who were previously divided over Brexit and still provide more than half of Labour's campaign funding, are now at the forefront of a new push for much closer ties with the EU.
Armed with a huge 5,000 voter survey by the pollster who has carried out strategic research for both Labour and the unions, the Trades Union Congress (TUC) has joined with business groups and others to urge Sir Keir to rethink his Brexit red lines.
While the prime minister has insisted he will resist what he calls 'a false choice' between the EU and US the TUC's public demands are being reflected in private by many in Labour as well.
It follows President Trump imposing a 10 per cent base 'reciprocal tariffs' on the UK, half of the 20 per cent slapped on the EU. Other countries such as China, South Korea, Japan and Cambodia faced tariffs of more than 30 per cent.
But some specific tariffs including 25 per cent on automobile, steel and aluminium products have hit the UK as well putting at least 25,000 jobs at risk in the car-making sector alone.
TUC general secretary Paul Nowak told The Independent: 'The British public agree – they overwhelmingly back a common-sense reset. The Conservatives' botched Brexit agreement has set workers and business back at home and abroad.
'It's time for a new approach that honours the referendum result while giving us a much-needed closer trading relationship with EU.'
The survey of 5,000 voters for the TUC by Peter McLeod, who carries out private strategic polling for the TUC and Labour, revealed that 66 per cent now want closer with the EU.
Notably supporters of pro-Brexit parties want closer ties with the EU. Even Reform (former Brexit Party) voters now back closer ties with Brussels by 42 per cent to 41 per cent, while Tory voters overwhelmingly back closer ties by 67 per cent to 21 per cent.
The polling also showed that eight in ten Conservative to Labour switchers at the 2024 general election while more than half (56 per cent) of Reform-leaning voters (who voted Labour in 2024 but would now vote Reform) support a closer UK-EU relationship. Only 28 per cent opposed closer ties.
Pollster Peter McLeod said: "The new poll confirms that what we heard from those voters also holds nationally by a very strong margin.
"The focus groups help explain why a lot of people feel this way. The dominant view was that Brexit has not been a success and that it would be sensible to try for a better deal. Some of the Leave voters in our groups expressly said that their votes had been a mistake.'
Labour MPs are also increasing demands for the Brexit reset talks set to conclude in a month are made much more ambitious.
Walthamstow MP Stella Creasy, chair of the Labour Movement for Europe, said: 'We do five times more business with the European Union than with America. It is in our interest to have a close and stable trading relationship with Europe, but right now, that is up for grabs, too.'
A number of other Labour MPs are also voicing demands for a more ambitious approach in private.
One bemoaned Labour's manifesto promise on red lines not to reenter the single market or customs union.
'We thought we had to keep to the Brexit settlement but actually we could have gone to voters with a much more pro-EU policy,' the MP complained.
'We have to unpick Brexit as best we can,' added another.
Business groups are also adding their voices to demands of a much closer relationship with the EU in the wake of Lib Dem leader Sir Ed Davey demanding that the UK enters an 'economic coalition of the willing' in trade and rejoins the EU's customs union.
Chris Southworth, secretary general of the International Chamber of Commerce United Kingdom (ICC UK), said: 'It is critical the UK shifts gears and moves on from the toxicity of Brexit. We need to quickly adapt to a world that has changed dramatically since 2016.
'The EU is our closest trading partner with 40 per cent of UK trade dependent on the continent. We have much more in common than we have differences when it comes to trade so the economic priority must be to strengthen our relationship with the rest of Europe so we stand strong together to protect our economies from the impact of US tariffs.'
Ben Farrell, chief executive of the Chartered Institute of Procurement and Supply (CIPS) added: 'With all the disruption from tariffs going on it is not unreasonable to think this could push the UK closer to the EU in terms of trade.'
Research carried out for Best for Britain by Frontier Economics shows the government can secure 1.5 per cent growth from a better trade deal with the EU that deepens alignment on goods and services.
Tom Brufatto, director of policy and research at Best for Britain said: 'The most effective course of action isn't trying to appease the party that is hurting us with tariffs, it's offsetting that damage by securing a common sense deal with our closest and more reliable trading partners in Europe.'
But former Tory business secretary Sir Jacob Rees-Mogg is one of a number of senior Brexiteers still disputing the conclusions regarding Trump's tariffs.
He told The Independent: 'We are clearly better off outside the EU as we are being affected less by tariffs and crucially are not forced to impose self harming retaliatory tariffs. Additionally, we save billions each year as we are not subscribing to the EU budget and we are helping our economy by not applying their silly rules. AI is a good current example.'
They still take comfort that the UK got 10 per cent instead of the EU's 20 per cent.
Mike Galsworthy, chair of the European Movement UK, is pressing for Sir Keir to abandon his red lines altogether with the backing of a large number of MPs.
He said: "The Brexit red lines are utterly obsolete. Everyone knows it and these data show, yet again, that the people of this country care much about the economy than self-flagellating with three self-imposed red lines following a referendum on a different question nine years ago."