Forget Farage – Keir Starmer can’t waste this chance to go big on the EU

Keir Starmer has allowed Nigel Farage to set the government's agenda on immigration. But he must not dance to Farage's tune on the EU.

The prime minister must be bold at a crucial summit in London on Monday to agree a reset with the EU. But Brussels officials tell me they're worried Starmer's "three nos" – to rejoining the single market and customs union and restoring free movement – are limiting the scope of the deal. “Flexibility cannot be for one side only,” one said.

The tough immigration measures announced by Starmer this week already risk harming UK growth. He shouldn't make the same mistake twice.

The trade unions want Starmer to cross one of his red lines. “We’re wanting the government to look at every option on the table, up to and including the customs union," said Paul Novak, the TUC’s general secretary.

That’s not going to happen – at least until Labour drafts its manifesto for the next election. But Starmer can and should go further by pushing the boundaries of last year's manifesto pledges to the limits, for example by forging a closer customs arrangement to reduce trade friction.

This offers the government its best shot at securing economic growth and reducing Brexit's 4 per cent hit to GDP. An ambitious reset could hand Rachel Reeves some precious headroom against her fiscal rules as the Office for Budget Responsibility might raise its growth forecasts.

There are tense last-minute negotiations ahead of the summit. I'm told the French want a longer extension of the existing deal, which gives their fishing fleets access to British waters, than the UK has offered. France is threatening to impose the same time limit on an agreement to streamline rules for trade in agrifoods. The UK wants an open-ended deal to provide certainty for the food and agricultural sectors in the hope of lowering food prices.

In theory, France could veto the centrepiece of the reset: a security and defence pact. UK ministers are tiptoeing nervously towards accepting a youth mobility scheme for under-30s, a key EU demand, though the details will not be settled until later this year. The same applies to cooperation on the energy market and carbon border taxes.

Starmer will try to overcome the outstanding differences in the margins of a meeting of the wider European Political Community in Albania on Friday. There will probably be a deal on Monday; the UK and EU can't afford a failed summit that would delight Vladimir Putin and suggest Europe can't get its act together on defending the continent.

Even if Starmer stormed out of the talks screaming that he would never talk to the EU again, Farage would cry "Brexit betrayal". So would the Conservatives. Kemi Badenoch has warned the EU her party will reverse some of Starmer's proposals if it regains power – the definition of an empty threat when the Tories are in third place and 11 percentage points behind Reform UK in the opinion polls. The two Eurosceptic parties will direct their fire at the PM for agreeing to align with future EU regulations on agrifoods and allowing the European Court of Justice to police the agreement.

It suits the Tories and Reform to live in the past on the EU, but the world has moved on since the 2016 referendum. The reset is about a better, more prosperous future.

Although Starmer can claim he is acting in line with public opinion on immigration, most voters now think Brexit was a mistake and are more open to closer EU ties than Farage and Badenoch would have us believe. People prioritise EU trade links over those with the US.

Ministers agree – in private. One told me: “The media will spotlight the US deal because it’s with Trump but the EU is a more important market.” True: the UK exports almost twice as much to the continent as to the US.

However, some Labour strategists are getting cold feet about the scale of the EU reset following Reform's sweeping gains in this month's local elections. Starmer should ignore their advice.

He might never win his battle with Farage over immigration, because the Reform leader will always outbid him. But the EU fight is one the PM can win. To do so, he will have to make the case for closer ties. It is a strong one, based not on starry-eyed pro-Europeanism but a clear-eyed national economic interest.

Ministers describe Starmer’s EU strategy as "ruthlessly pragmatic". There's nothing wrong in that but it shouldn't translate into caution. Starmer cannot afford to waste this opportunity to go big on the EU.