MAGGIE PAGANO: Reversing Brexit will not go down nicely in historical past books for Chancellor

Rachel Reeves’ recent comments that the UK must have closer relations with the European Union represent the clearest sign yet of the grip which Labour’s power brokers and the Left now have over the Cabinet – and the extent to which the Chancellor is fighting for her survival.

Reeves, together with the Prime Minister, Keir Starmer, has always wanted stronger ties with the European Union.

But until now they have taken a sotto voce approach, not wanting to alienate Leave supporters – many of whom are Labour voters – or be accused of Brexit betrayal.

Not anymore. The gloves are off, and Reeves has taken a big gamble in saying out loud what so many in Labour have wanted all along – further alignment with the EU across sectors to push for greater trade. Her decision to be so outspoken – arguing that closer ties are the ‘biggest prize for UK economic growth’ – has also been made easier by the resignation of Morgan McSweeney, the PM’s former chief of staff, who sensibly advised taking the softly-softly approach towards the EU for fear of upsetting Red Wall voters.

Reeves is under enormous pressure on all fronts. Even Angela Rayner, her erstwhile front-bench colleague, felt enabled to launch the most extraordinary attack on the Chancellor for her mishandling of the hospitality industry. Quite right too. By throwing red meat to the Rejoiners – who after Starmer’s near-death experience are flexing their muscles – she will have hoped to buy herself some time before the PM sacks her too to save his skin.

More pertinently, what does the Chancellor hope to achieve by snuggling up to the EU? She is correct in pointing out the value of EU trade. Almost half of our trade is with the eurozone.

The gloves are off: Rachel Reeves, together with the Prime Minister, Keir Starmer, has always wanted stronger ties with the European Union

There are, of course, always strong arguments for improving trade with our biggest partner, particularly now that the US is imposing tariffs and China is dumping goods, willy-nilly.

But how would this be achieved without giving up Brexit freedoms? And why now, when the EU is also suffering from stagnant growth?

She has three options. First, rejoining the Customs Union, a move Starmer has ruled out, and would be the ultimate Brexit betrayal – but it’s still a possibility. Second, joining the European Free Trading Area or the European Economic Area which would give access to the single market.

Or third – and this is the more likely pick’n’mix approach – negotiating alignment in critical sectors such as financial services, agricultural products or tech, one of the UK’s most dynamic industries.

But why would the EU give us advantages after all the Brexit dramas? Counter-intuitively, it could well be that the EU – itself riven with internal politics about how to be more competitive – might rather like having the UK on side as it fights off President Trump’s volatile tariffs and President Xi’s aggressive dumping policy.

Yet the danger for Reeves is that, in her hurry to save her job, she will panic when the next round of EU trade negotiations take place later this spring. She might tie herself in knots rather than negotiate closer ties. The Chancellor should be careful what she wishes for. Reversing Brexit won’t go down well in the history books.