When British Prime Minister Keir Starmer led the Labour Party to a landslide victory in July 2024, he hailed the result as the end of 14 years of misrule by the Conservative Party and the beginning of a long period of stable, technocratic government. Starmer, the cautious former director of public prosecutions, drew a deliberate contrast to Conservative Prime Minister Boris Johnson’s illegal parties during the COVID-19 lockdown and the financial meltdown triggered by Johnson’s successor, Liz Truss, by promising a return to seriousness, and his Chancellor of the Exchequer Rachel Reeves vowed to pair fiscal responsibility with a more active state. The exhausted electorate gave Labour a modest 33.7 percent of the vote, which translated to 411 out of 650 seats in the House of Commons because of the way votes were distributed. It was no ringing endorsement—immediately dubbed a “loveless landslide”—but it was more than enough to earn Starmer the benefit of the doubt.

Almost two years later, voters’ doubt has hardened into something closer to contempt. Labour has been trailing Nigel Farage’s insurgent Reform UK party in most national polls by almost ten points, a sharp contrast to the 2024 election, when Reform’s share of the vote was nearly 20 points below Labour’s. On June 22, his position no longer tenable, Starmer bowed to the inevitable and announced that he will step down as soon as Labour chooses his successor. His all but inevitable successor is Andy Burnham, the popular former mayor of Greater Manchester who joined Parliament after winning a by-election in Makerfield on June 18 with nearly 55 percent of the vote.

Most explanations for Labour’s troubles focus on tactical errors: Starmer’s communication failures, Reeves’ overly strict fiscal rules, a cut in 2024 to pensioners’ winter fuel payments, and a tax on family farms imposed in 2025. All are real, but they are symptoms, not causes. The deeper story is that Brexit, the defining political event of modern British history, is finally presenting its bill, and Labour happens to be in office as it arrives. For a decade, the United Kingdom managed to defer a full reckoning with its vote to leave the European Union in June 2016. Starmer’s strategy depended on neutralizing Brexit as a live political issue, defusing it so that it could neither rally his opponents nor split his own coalition. This meant ruling out a customs union or membership in the single market and dressing up modest regulatory cooperation with the EU as the limit of his ambition.

Electorally, that strategy worked. It cost nothing in the short term, and in the comparatively forgiving conditions of 2024, the British economy could underperform its peers but avoid an acute crisis. That environment no longer exists. U.S. President Donald Trump’s return to the White House, his weaponization of tariffs, and the breakdown of the rules-based trading order have exposed a British economy with no shock absorbers left. The EU, for all its dysfunctions, has a huge internal market and the scale to negotiate with the great powers as more than a supplicant. The United Kingdom does not.

The best way now for the United Kingdom to weather the global storm—and the best way for Labour to keep its coalition from falling apart—is to pursue closer partnership with the EU. There is reason to think a grand bargain is possible. The British economy needs access to European markets, and Europe needs Britain’s military power. What is needed is a final, elusive ingredient: political will.

To understand why the United Kingdom is suffering more than its continental neighbors from recent economic shocks, it helps to recall what EU membership provided. The single market gave British firms barrier-free access to 450 million consumers and made the United Kingdom a magnet for foreign investment seeking a foothold in Europe. The customs union spared British exports the rules-of-origin checks, sanitary inspections, and paperwork that now burden shipments across the English Channel. Rules that allowed EU firms to operate anywhere in the bloc—a privilege known as passporting—made the City of London the continent’s de facto financial center, and coordinated regulation gave the United Kingdom a seat at the table when European standards were written. None of this required the United Kingdom to give up its currency, central bank, fiscal policy, or army. The opt-outs British Prime Minister John Major negotiated at Maastricht in the early 1990s gave the country most of the upside of integration with little of the supranational constraint. This was a deal the rest of Europe tolerated because the United Kingdom brought military weight, financial expertise, and a counterweight to Franco-German dominance.

The decision to leave that arrangement was, as Mark Blyth and I argued........

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