The leader of the Trades Union Congress has called for “the closest possible economic and political relationship with the European Union”.
The UK’s most senior trade unionist, Paul Nowak, told the BBC that he believed this would be “essential” to boost economic growth and warned that faith in mainstream politics could “drain away” unless living standards improved.
Nowak urged the PM not to rule out a customs union with the EU, which he argued would lower barriers to trade with the UK’s biggest market.
Sir Keir Starmer has said he wants to “reset” relations with Brussels but has ruled out rejoining the EU’s single market and customs union.
The prime minister fears that recent deals with the US and India would be scrapped if the UK rejoined.
Labour’s manifesto ruled out signing up to the existing EU custom union.
Recently, senior cabinet ministers such as Health Secretary Wes Streeting and Deputy Prime Minister David Lammy have danced along the edges of those red lines, bemoaning what they see as the economic damage of Brexit and extolling the virtues of closer relations.
Earlier this month, 13 Labour MPs backed a Liberal Democrat bill requiring the government to begin negotiations on joining a bespoke customs union with the EU.
The Conservatives and Reform UK oppose rejoining a customs union, and say it would undermine what they see as the benefits of Brexit.
A customs union would eliminate tariffs or taxes on goods between the UK and the EU, reducing bureaucracy.
But critics point out that it would also severely curtail the UK’s ability to strike bespoke global trade deals, as the EU would place a common tariff on all goods from outside the customs union area and would expect the UK to conform to common standards.
Nowak told the BBC in an interview: “2026 really needs to be the year when the government gets to grips with the cost of living crisis.”
He said that “one of the reasons we are seeing prices so high in our supermarkets is because of that bad Brexit deal”, adding: “Absolutely the government should rule nothing out. They should look at every option for our relationship with the European Union up to and including a customs union.
“I go round workplaces week in, week out – aerospace, automative, steel – and having a good deal with Europe is essential.”
Nowak, who became general secretary of the TUC in 2023, also said the government must act on a wide range of fronts to make people feel better off, or risk paying a political price.
He pointed to research from the Joseph Rowntree Foundation that suggested that voters who felt financially insecure were abandoning Labour at a greater rate than those who felt more secure.
The TUC itself commissioned polling suggesting one in five people were skipping some meals, and one in three expected their financial situation to worsen.
Nowak praised action the government had already announced to help some families, such as lifting the two-child benefit cap, but said the government should do more.
As TUC leader, Nowak represents 47 trade unions with a collective membership of more than five million people.
He has the ear of government and this is the message he is shouting into it: that there should be no backsliding on implementing the newly enacted Employment Rights Act.
The legislation will give workers access to sick pay and paternity leave from the first day on the job and contains new protections for pregnant women and new mothers.
But many of its measures will not be implemented immediately and, in November, Labour backed down from its plan to give all workers the right to claim unfair dismissal from their first day in a job. Instead, it will be after a six-month period.
The Conservatives say the act will place new burdens on businesses and destroy jobs.
Nowak also called for no cap to be placed on penalties big employers would face if they tried to prevent unions from organising in their workplaces, and insisted the new rights would boost living standards by “making work pay” and by making employment more secure.
A government spokesperson said it knew there was “more to do to help families with the cost of living”, pointing to Budget measures to cut energy bills, freeze rail fares and prescription fees, and raise the living wage, among others.
“With the passing of the Employment Rights Act, we will transform workers’ rights for the 21st Century with a clear commitment to implement this in full and on time,” they added.
Labour is trailing Reform UK in the polls, but Nowak said the solution was not to “get on the same pitch” on immigration.
“I don’t think you can out-Reform Reform,” he said.
“For too many people at the economic sharp end in low paid employment, they feel that change hasn’t come, or come quickly enough.
“But for lots of people it looks like there is a simple answer in Reform.
“My job isn’t to tell union members they have voted the wrong way. The responsibility is on the government to demonstrate that mainstream politics can deliver the change people want.”
But it would seem discontented voters are not just drifting to Reform. The left candidate Andrea Egan was elected this month as the leader of the country’s biggest union Unison, and she is calling for a change of direction from the government and a change of Labour leader.
Supporters of the incumbent, Christina McAnea, felt that her perceived closeness to the Labour leadership had harmed her chances.
Nowak said: “You only have to look at the opinion polls – the prime minister is struggling personally too.
“If the government can deliver on improving living standards, then I think the polls will look after themselves. A Labour government is always at its best when it is ambitious and on the front foot.”
