From the series European news
Ending the chaos
and decline
caused by Conservative governments, with their succession of four prime ministers between 2016 and 2024, and rebuilding
the country: this is how Keir Starmer described his commitment to national renewal
in Labour’s 2024 election manifesto. A year and a half after the clear victory that delivered Labour 411 of the 650 seats in the House of Commons, YouGov figures [December 16th] show the current prime minister’s approval rating has fallen from 44% to 18%. The political landscape is fragmenting, with the two traditional mainstream parties being overwhelmed by the rise of fringe parties.
The government has been marred by minor scandals, muddled communications, statements followed by U-turns, and a chaotic run-up to the announcement of the new budget on November 26th. With defeat anticipated in the local elections in May, frustration is spreading through the ranks of the Labour Party, fuelling centrifugal forces and even speculation about the possible replacement of the prime minister.
Turning against migrants
If the election were held today, several polls predict that Reform UK would win 27-33% of the vote (up from 14% in the July 2024 election); Labour would win 14-20% (down from 34%), the Conservative Party 16-21% (24%), the Green Party 10-18% (6%), and the Liberal Democrats 11-14% (12%). The trend highlighted by the polls is confirmed by party membership figures. With 268,918 members, Nigel Farage’s right-wing populist party, Reform UK, claims to have become the largest party, overtaking Labour, whose membership has fallen from half a million in 2020 to fewer than 250,000. The Green Party is seeing the popularity of its new leader, the self-declared eco-populist
Zack Polanski, translate into a surge to 180,000 members, while the Tories are falling further behind, with 123,000 members counted in July, making them now the fourth largest party. There has also been a slight decline for the Liberal Democrats, who stand at just over 83,000 members. Finally, the New Your Party, founded by Jeremy Corbyn and Zarah Sultana, has now surpassed the threshold of 50,000 members [The Times, December 13th].
Although Reform UK holds only five seats in the House of Commons, it has managed to dominate the political and media debate with its relentless campaign against immigration. In an attempt to stem the haemorrhage of support, the Labour government carried out a reshuffle in September and adopted a fierce anti-immigrant posture. The new Home Secretary, Shabana Mahmood, the first Muslim woman to hold that position, is a member of the conservative Blue Labour faction of the party, and has imposed a hardening of refugee reception policies, inspired by the Danish model.
Mahmood explained that it is necessary to restore order and control
to avoid losing popular consent for having an asylum system at all
and to stop the dark forces
that seek to stir up anger
and hate
. For Mahmood, born in Birmingham to parents with Pakistani roots, this is a moral mission
, because a country without secure borders is a less safe country for those who look like me
[The Guardian, November 17th]. With this shift to the right on immigration, however, Labour is exposing its left flank; the Green Party, in particular, with its pro-asylum seeker stance, is taking full advantage.
Empty coffers
Underlying the disappointment with the Labour government is also the fact that the executive is squeezed between the bond markets and the desiderata of its MPs and electorate, owing to its very limited room for manoeuvre on the budget and a growth forecast of only 1.2% for 2026. The country has become a zero-sum economy
, wrote Financial Times columnist Martin Wolf. Now, more for some means less for others
, because in the absence of serious efforts to cut spending, which seem to be politically impossible, taxes must be raised
. The result is a chronic fiscal problem
that is almost impossible to manage politically [Financial Times, October 29th].
After reaching 5.3% of GDP in the 2024-25 fiscal year, the budget deficit is expected to fall to 4.5% in 2025-26, with the goal of reaching 1.9% by 2030-31. It is instructive to compare this with France, which had a deficit of 5.8% of GDP in 2024 and aims to reduce it to below 3% by the end of the decade. One difference between the two countries is that the UK does not enjoy the shield of the single currency and of the European Central Bank, protections from which France benefits. As a result, even though the UK’s debt-to-GDP ratio is lower than France’s (95% versus 116%), higher interest rates mean that the cost of servicing British debt is higher: 3.7% of GDP in 2025, versus 2.2% for Paris.
It is notable that in both cases the cost of debt exceeds defence spending. The comparison should also take into account that the UK Treasury must bear the losses accumulated under the Bank of England’s asset purchase programme (Asset Purchase Facility), estimated at £164 billion by the end of 2035. This figure is highly sensitive to changes in interest rates: a one percentage point increase from 2026 onward would add £39 billion to the bill [Office for Budget Responsibility, Economic and Fiscal Outlook, November 2025]. Without the single currency
, wrote Stéphane Lauer of Le Monde, the French situation would already have led to devaluation, a large-scale attack by the financial markets, and drastic cuts to our social model
; instead, in the event of an acute crisis, investors remain convinced that the ECB will come to our rescue
[Le Monde, November 25th]. The British government, by contrast, is under constant scrutiny by the markets, and any ill-judged budgetary manoeuvre would have immediate repercussions, as Liz Truss’s government demonstrated in 2022.
Rapprochement with the EU
In an international context marked by trade wars and protectionism, the British government sees few options other than rapprochement with Europe as a path to economic growth. In early December, Starmer stated: There is no credible economic vision for Britain that does not position us as an open, trading economy. We must confront the reality that the botched Brexit deal significantly hurt our economy. You do not need to have a PhD in economics to know that erecting unnecessary trade barriers with your biggest trading partner will hurt growth and raise the cost of living. So one element of our economic renewal will be continuing to move towards a closer trading relationship with the EU
[The Guardian, December 1st].
This has sparked speculation about the possibility of a British return to the EU. After the prime minister’s economic adviser, Minouche Shafik, and Deputy Prime Minister, David Lammy, suggested a return to the European customs union, Starmer said in an interview with The Economist that he could see scope for moving forward as an iterative process
on the relationship with the EU [December 6th]. While the prime minister later reiterated that a return to the customs union remains a red line
, the Health Secretary, Wes Streeting, suggested crossing this line, perhaps in an attempt to position himself as a future challenger to Starmer.
Unsurprisingly, such openness towards the EU has been fiercely criticised by the Eurosceptic press – led by The Daily Telegraph, The Sun, and the Daily Mail – as a betrayal
of Brexit.
In May 2025, the British government initiated a reset
with the EU, which also involves renegotiating certain elements of the EU-UK trade agreement reached after Brexit. The first concrete result was the announcement of the UK’s return to the Erasmus student exchange programme. However, there have also been setbacks in London’s European turn. The UK failed to reach an agreement with Brussels to join the EU’s SAFE scheme, a €150 billion programme of soft loans for joint military procurement. The stumbling block, which recalls the terms of the disputes over the UK rebate
during Margaret Thatcher’s time, was the contribution to the European budget demanded by Brussels in exchange for British participation in the programme. This will certainly not be the end of the debate on military cooperation, not least because it remains unclear how the UK intends to finance the announced increase in its military spending from the current 2.3% of GDP to 2.6% by 2027, targeting 3% in the next parliamentary term.
London in the European camp
Since the Trump administration called into question its support for Ukraine, even signalling its willingness to conclude an agreement with Moscow over the heads of the Europeans, it has become clear that, even in the field of foreign and security policy, London has few alternatives to its alliance with the continent. While The Times argues that Britain, France, and Germany must assume responsibility for the defence of the continent, shielding Ukraine
in a way that keeps the US on side and Russia at bay
[November 25th], The Guardian believes that it would now be unwise for any European country to bet its national interest on transatlantic partnership
and is therefore calling on the prime minister to accelerate his claimed ambition of restored closeness to Europe
[December 4th].
However, according to The Times [December 20th], the fact that the EU agreed at the European Council on December 18th to a joint loan of €90 billion to support Ukraine put[s] Sir Keir Starmer in a quandary
. London is under pressure from the EU to contribute to the loan
, but it would be hard to persuade British voters to use taxpayers’ funds for a loan
; this leaves the option of using the approximately £8 billion of Russian assets frozen in the UK. By leveraging the EU budget to take on a common debt for Ukraine, EU member States have been able to avoid both drawing on their national budgets and pursuing the use of frozen Russian funds, which the ECB had warned against. If London wants to maintain its credibility as a driving force behind European defence and as a protector of Ukraine – as it has so far done within the E3 (a group comprising France, the UK, and Germany) and through the coalition of the willing
– it will have to find a way out of this impasse. Brexit has also damaged the UK’s strategic capacity to act.