Davey urges Starmer to start EU customs union talks

The Liberal Democrats have stated that Sir Keir Starmer should "fire the starting gun" on establishing a new UK-EU customs union when he meets with European leaders in Brussels on Monday. Liberal Democrat leader Sir Ed Davey believes this move would be a "no-brainer" for the Prime Minister, providing a "rocket booster" for the UK economy and "strengthening our hand against US President Donald Trump."

However, Keir Starmer has made it clear that he will not rejoin the EU customs union and single market, considering them "red lines." Despite this, Labour has not ruled out joining another bloc – the Pan-Euro-Mediterranean (PEM) convention – as part of an effort to "reset" European relations. PEM allows for tariff-free trade of some goods from dozens of countries across Europe, North Africa, and the Middle East.

The Liberal Democrats argue that the UK should join PEM as a "first step" towards rejoining a UK-EU customs union. This union allows for tariff-free movement of goods between EU member states but prevents members from striking their own trade deals. The party's ultimate goal is for the UK to rejoin the EU, but they have only recently begun campaigning on this issue since the general election.

Downing Street has said that Sir Starmer's meeting with EU leaders on Monday – the first time a UK Prime Minister has been invited to such a meeting since Brexit in 2020 – will focus on defense and security cooperation. Ahead of an interview on the BBC's "Sunday with Laura Kuenssberg" program, Sir Ed had written to Chancellor Rachel Reeves, calling on her to commission the Office for Budget Responsibility (OBR) to conduct in-depth research into the economic impact of a new customs deal with the EU.

In his letter, Sir Ed wrote that these forecasts should be made public as part of the OBR's forecasts in the Spring Budget statement on March 26th. "The Chancellor is racking her brains for new ways to boost our economy," Sir Ed said, "but a solution is staring her in the face: a new UK-EU customs union deal, which would boost trade for British businesses and raise vital tax revenues for our public services."

Earlier this month, the EU's new trade commissioner, Maroš Šefčovič, told the BBC that he was open to the UK joining PEM as part of a post-Brexit "reset" of relations. Regarding the possibility of the UK joining the arrangement, the Prime Minister's official spokesperson previously told reporters: "We have always said that we want to explore ways to reduce barriers to trade without breaching our clear red lines."

The spokesperson also emphasized: "The arrangements being discussed are not a customs union. Our red lines have always been that we will never join our customs union, never rejoin the single market, no free movement of people, but we won't preempt those discussions." The Conservatives, on the other hand, argue that joining PEM would make the UK "a rule-taker, not a rule-maker."

Conservative leader Kemi Badenoch accused the government of "trying to re-open old arguments and slowly drag us back into the EU," after they "opposed us every step of the way" when the previous Conservative government led the UK out of the EU. She issued five tests for Sir Starmer that she believes would ensure "he does not overturn Brexit," including: no "backsliding" on free movement of people or mandatory relocation of asylum seekers, no new payments to the EU, and no reduction in fishing rights.

Badenoch also stated that on European security issues, NATO must have "primacy" – this being her final test.