'Brexit did deep damage.' With those words at her Mais lecture, Chancellor Rachel Reeves made it clear that there has been an important shift within the Labour Party—one that government ministers have been signaling for some time.
In her address, she emphasized the necessity for a deeper relationship with Europe while assuring that the government is not trying to reverse Brexit.
Reeves' comments reflect a growing sentiment that the UK must reset its post-Brexit relationship with the EU to address persistent economic sluggishness. The Labour Party's 2024 election manifesto proposed renegotiation of the Trade and Co-operation Agreement, aiming to reduce customs checks on food and agricultural products exported to the EU.
However, the manifesto maintained firm boundaries, explicitly ruling out any return to the single market, customs union, or freedom of movement, with no suggestion of rejoining the EU altogether. This cautious approach stems from the party's heavy defeat in the 2019 elections, leading Labour to acknowledge the choice to leave the EU.
Labour's tone has gradually evolved. Prime Minister Sir Keir Starmer noted post-Budget that 'Brexit had significantly hurt our economy' and the need to pursue a closer relationship with the EU. Though red lines in Labour's manifesto remain, his speech indicates a recognition that a more ambitious approach may be needed.
Pressure within Labour is also seen with figures like London Mayor Sadiq Khan advocating for the UK to rejoin the EU customs union and single market, suggesting a strategic pivot towards addressing the concerns of pro-EU constituents.
On polling data, 80% of Labour’s support stemmed from constituents who favor rejoining the EU, marking a challenge for the party as it seeks to regain trust from once-loyal working-class voters now swayed by the Brexit discourse.
Although Labour is currently adapting its strategy to appeal to Remainers, it remains to be seen how this shift will impact its base amidst rising support for parties like the Greens and Liberal Democrats. As it stands, Labour faces challenges not only in recapturing its working-class voters but also balancing the expectations of its pro-EU supporters.
