LONDON, December 26, 2023 — The head of the UK’s trade union movement is urging Prime Minister Keir Starmer to pursue a new customs union with the European Union, arguing that closer economic ties would directly improve living standards for British workers.

A Fresh Look at Brexit Economics

Calls for a revised relationship with the EU are gaining momentum as economic pressures mount.

  • Paul Nowak, general secretary of the Trades Union Congress, believes a customs union could lower prices and protect jobs.
  • Nowak cited concerns about the reliability of the U.S. as a trading partner, emphasizing the importance of a strong relationship with the UK’s largest trading bloc.
  • The push for closer ties with the EU comes amid growing criticism of the current Brexit deal from within the Labour party.
  • Union leaders are increasingly vocal about the need for policies that address the cost of living crisis and improve workers’ rights.

Paul Nowak, general secretary of the Trades Union Congress, stated that Starmer should forge “the closest possible economic and political relationship with Europe,” citing both geopolitical considerations and the need to make life more affordable for workers. “The last 12 months have proven that the White House is not the reliable ally that we thought it always was, and so you’ve got to have the right relationship with your largest trading partner,” he said during an interview at the TUC’s London headquarters.

Nowak specifically suggested the government “look at every option to improve our relationship with the European Union, up to [and] including a customs union.” A customs union would eliminate customs checks on some or all goods traded between the UK and the EU, though it would also limit Britain’s ability to negotiate independent trade agreements.

Could a new customs union with the EU lower costs for everyday shoppers? Nowak believes current trade friction isn’t just discouraging investment, but is also directly contributing to higher prices. “In my mind, it’s about protecting good quality UK jobs and supply chains but it’s also about a practical impact on prices in supermarkets,” he explained.

“I don’t think you need to wait for the next election,” Nowak added. “I think what the British public want is action on living standards and action on the cost of living. And if a better Brexit deal is part of that, I think the public would support it.”

Nowak’s intervention adds to the pressure on Starmer to adopt a more ambitious approach to relations with Brussels, despite his previous insistence that a new customs union would be a “clear red line” that could jeopardize trade deals with the U.S. and India.

The call for closer ties follows similar comments from health secretary Wes Streeting, a potential future Labour leader, who told the Observer last week that Brexit had inflicted a “massive economic hit” on Britain and that a “deeper trading relationship with the EU” would be the most effective way to stimulate growth.

Nowak also argued that a deal allowing greater youth mobility between the UK and EU would be popular with the public. “If you asked ordinary working-class people in this country, do they want their kids to have the opportunity to live and work abroad, they would say, absolutely, yes.”

The TUC has consistently advocated for stronger ties with the EU, and Nowak noted that “all the polling shows that whether you voted for leave or remain, people think we’ve got a bad Brexit deal at the moment.”

He argued that addressing Brexit should be a priority for Labour to counter the electoral challenge posed by Nigel Farage’s Reform UK party. “We have got to do more to step up to the plate to prove that mainstream politics can deliver the positive change in people’s living standards.”

Union leaders have become increasingly critical of the Starmer administration in the past year, particularly over welfare reform, as Reform UK gains traction in opinion polls. This month’s election of Andrea Egan, a left-wing candidate, to lead Unison, the UK’s largest public sector union, could further strain relations, especially given the government’s plans for restrained public sector pay increases.

For the TUC, representing 47 member unions, a key priority for 2026 is ensuring the full implementation of new workers’ rights legislation passed earlier this month. Unions are concerned that business groups will attempt to weaken or delay key provisions through secondary legislation.

“A Diet Coke version of the Employment Rights Act will not cut it,” Nowak warned, emphasizing the need for “absolutely watertight” regulations guaranteeing workers’ rights to guaranteed hours and union access to workplaces.

His comments represent a challenge to business groups who argue that stronger employee protections could discourage hiring and increase costs. Nowak countered that the government should instead focus on reforms to prevent employers from classifying workers as freelancers to avoid their new obligations.

“What I don’t want to see is a whole raft of new employment rights, and employers are saying, ‘Don’t worry, we’ve got a way around this, which is, now you’re effectively self employed’,” he said, urging Labour to review workers’ statuses. “This, in my mind, is the key or one of the keys to winning the next election, to have an Employment Rights Act that actually is having an impact in workplaces.”