Labour has decided that Britain’s economic salvation — and, therefore, the Government’s political lifeline — lies in closer relations with the European Union. Chancellor Rachel Reeves declared this month that Britain should forge stronger ties with European business. Europe Minister Nick Thomas-Symonds, while ruling out rejoining the bloc, has insisted that “alignment is not a dirty word.” This week, it was reported that Keir Starmer is set to bring 76 EU laws back onto the UK statute book.

Alignment may not be a dirty word, but it is the wrong strategy for this Labour government. It represents a departure from the party’s historical roots, and it helps to explain why Starmer’s government currently feels so adrift.

Policies of domestic preference and state aid were once basic parts of Labour’s economic toolkit. The Attlee and Wilson ministries in the Forties, Fifties and Sixties established import controls, limited the flow of capital in and out of the country, implemented rules about national ownership, and provided subsidies to support domestic producers against foreign competition.

Known as “economic planning”, it was part and parcel of a Labour government. Parliamentary sovereignty was jealously guarded by ministers, who knew it was crucial to delivering the policies that would provide employment and investment across the country. In opposing attempts to join the European Economic Community in 1961, Attlee stated: “I do not believe in a regulation of our internal affairs by some external body.”

Outside the EU, the UK Government has much wider discretion over state aid, public ownership, tariffs, procurement, and other forms of national economic preference. These policy tools could be used to support struggling industrial regions and rebuild the productive base of the British economy. Yet Starmer has used them hesitantly, if at all.

In fact, his government has done the opposite, desperately seeking more trade deals and trying to attract foreign direct investment into Britain. In January, one Downing Street insider defined “Starmerism” as improving relationships with the US and EU while “opening up to China and finding pools of money in the Gulf States”.

Rather than using Brexit to pursue a more interventionist economic strategy, the Government is forging agreements with the EU which limit its freedom to do just that. The first stage of the “reset” agreement with Brussels, signed last May, entailed “dynamic alignment” with EU rules in certain areas of goods regulation. In practice, this binds the UK to the EU’s regulatory frameworks on an ongoing basis.

Labour also agreed to recognize the ultimate authority of the European Court of Justice in disputes involving EU law under the agreement. At the same time, it extended EU access to British fishing waters from 2026 until 2038. These all mark a terrible betrayal of those who voted for Brexit in order to take back control of our national future. As Attlee said, Labour should stand for “a Britain planned for the British by the British”, not “submitting our plans to be planned by a body of international civil servants”, as dynamic alignment will entail.

It is unsurprising that Conservative governments made little use of the multitude of economic planning powers restored by Brexit. These tools were historically associated with the Left rather than the Right. In principle, therefore, a Labour government had the most to gain from Brexit. Yet Starmer still treats Brexit primarily as a mistake to be mitigated rather than as a set of expanded opportunities for economic policymaking.

Labour is trading many of the policy freedoms created by Brexit in a desperate search for economic growth. Or, to borrow Harold Wilson’s critique of joining the EEC, it is selling national autonomy for the “problematical and marginal advantage in selling washing machines in Dusseldorf”.

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Richard Johnson is a Senior Lecturer in Politics at Queen Mary University of London.

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