Sir Keir Starmer has been handed a new Brexit headache after Paul Nowak, general secretary of the Trades Union Congress, urged the Prime Minister to keep the European Union's customs union on the table as a means of stimulating economic growth and addressing the cost-of-living crisis.
Britain's most senior trade unionist argued forging "the closest possible economic and political relationship" with Brussels was "essential" for boosting the economy.
Mr Nowak cautioned public confidence in mainstream politics would quickly erode Labour failed to improve living standards for ordinary families.
"2026 really needs to be the year when the government gets to grips with the cost of living crisis," he declared.
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Mr Nowak, who represents 47 affiliated unions with over five million members collectively, said the PM should examine every avenue for strengthening ties with the EU.
Mr Nowak pointed to the post-Brexit trading arrangement as a key factor behind rising household costs.
"One of the reasons we are seeing prices so high in our supermarkets is because of that bad Brexit deal," he stated.
The TUC chief was emphatic that ministers should remain open to all possibilities when negotiating with Brussels, including pursuing a much closer relationship.
Prime Minister has been warned by a top union boss to 'get to grips' with the cost of living crisis
|GETTY
"Absolutely, the government should rule nothing out," he said.
“They should look at every option for our relationship with the European Union up to and including a customs union."
Drawing on his regular engagement with workers across British industry, Mr Nowak added: "I go round workplaces week in week out, aerospace, automotive, steel, and having a good deal with Europe is essential."
Sir Keir has expressed his desire to "reset" relations with Brussels, yet he has explicitly ruled out rejoining both the single market and the customs union.
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TUC chief Paul Nowak called for the forging of 'the closest possible economic and political relationship with the European Union'
|PA
Yet, Sir Keir is concerned that existing trade agreements with the United States and India could be jeopardised if Britain were to rejoin.
Labour's election manifesto also specifically excluded signing up to the current customs union arrangement.
However, senior cabinet figures including Health Secretary Wes Streeting and Deputy Prime Minister David Lammy have recently pushed against these boundaries, lamenting what they view as the economic harm caused by Brexit while praising the merits of closer European ties.
Earlier this month, 13 Labour backbenchers supported a Liberal Democrat bill that would compel the government to open negotiations on a bespoke customs union with the EU.
Both the Conservatives and Reform UK remain opposed to any customs union arrangement, arguing it would undermine Brexit's advantages.
Mr Nowak highlighted research from the Joseph Rowntree Foundation indicating voters experiencing financial insecurity were deserting Labour at a faster rate than those feeling more economically stable.
With Labour currently trailing Reform UK in opinion polls, the union boss dismissed the notion of matching Nigel Farage's party on immigration policy.
"I don't think you can out-Reform Reform," he told the BBC.
Labour's election manifesto specifically excluded signing up to the current EU customs union arrangement
|GETTY
"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."
The union boss insisted it was not his role to criticise union members' voting choices.
"The responsibility is on the government to demonstrate that mainstream politics can deliver the change people want," he stressed.
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