Labour backs single market for transition period in dramatic Brexit policy shift
Labour has made a dramatic shift in policy on Brexit, announcing it would keep Britain in the EU's single market and customs union - and accept continued freedom of movement - during a transition period after March 2019.
In a move agreed with leader Jeremy Corbyn, shadow Brexit secretary Sir Keir Starmer also indicated that the party is ready to negotiate new single market and customs union terms which the UK could sign up to on a permanent basis, but made clear that any such deal would have to give Britain more control over migration.
The change comes on the eve of the third round of formal Brexit talks in Brussels at which David Davis is expected to press the EU's chief negotiator Michel Barnier to show "flexibility" on his refusal to discuss future trade relations until progress is made on the UK's divorce deal.
Labour's new position was welcomed by the TUC, whose general secretary Frances O'Grady said it would give working people "certainty on their jobs and rights at work" and show that Mr Corbyn's party were "the grown-ups in the room" on Europe.
But Liberal Democrats said the move was "all spin and no principle", pointing out that as recently as June Mr Corbyn sacked three shadow ministers for voting in favour of the single market.
The Scottish National Party's Westminster leader Ian Blackford said that Sir Keir's policy merely meant Labour delaying departure from the market, saying: "Labour still face a cliff edge, only later than the Tories."
The shift was announced as Mr Corbyn came under increased pressure from some parts of his party to adopt a more pro-EU stance, with a new group backed by former shadow health secretary Heidi Alexander and Wirral South MP Alison McGovern calling for a policy of "unequivocal" support for membership of the single market, customs union and European Economic Area.
But there was also a warning of a backlash from the one third of Labour supporters who voted for Brexit in last year's referendum, with a spokesman for the Labour Leave movement saying: "Seven out of 10 Labour constituencies voted Leave.
"Single market membership is EU membership in all but name. Labour must honour the referendum."
Conservative ministers have accepted the need for a time-limited transition period to put in place a new UK-EU relationship following the Article 50 deadline of March 29 2019.
But they insist that the UK must be outside the single market and customs union during this period - which observers expect to last two to four years - allowing it to control migration and strike up new trade deals with non-EU countries around the world.
Writing in The Observer, Sir Keir denounced this approach as "unnecessary and a highly risky path to take", warning it would increase disruption and red tape for business while forcing the UK into "rushed" agreements on issues like the future border with Ireland.
Labour put no time-frame on the transition, but Sir Keir said it would be "as short as possible, but as long as is necessary" and would be time-limited in order to prevent it becoming "a kind of never-ending purgatory".
He wrote: "Labour would seek a transitional deal that maintains the same basic terms that we currently enjoy with the EU.
"That means we would seek to remain in a customs union with the EU and within the single market during this period. It means we would abide by the common rules of both."
Looking ahead to the eventual permanent settlement, Sir Keir added: "We will always put jobs and the economy first.
"That means remaining in a form of customs union with the EU is a possible end destination for Labour, but that must be subject to negotiations.
"It also means that Labour is flexible as to whether the benefits of the single market are best retained by negotiating a new single market relationship or by working up from a bespoke trade deal."
A final deal would have to involve "more effective management of migration" while retaining the benefits of the customs union and single market as part of a "strong and lasting new relationship", he said.
Mr Davis appeared to be setting up a showdown with Brussels in the third round of formal Brexit talks beginning on Bank Holiday Monday in the Belgian capital.
London is frustrated at Mr Barnier's insistence that sufficient progress must be made on key aspects of the withdrawal deal, including the UK's "divorce bill", ex-pat citizens' rights and the Irish border, before there is any talk of future arrangements for crucial issues such as trade.
But Mr Davis is expected to urge Brussels to show more "imagination" to drive talks forward, with one Government source warning that Brussels must not "drag its feet" ahead of an October summit at which the 27 remaining EU states will decide whether to move on to the second phase. .
Officials at his Department for Exiting the EU (DExEU) said that a series of position papers published over the past fortnight showed that conversations about the exit deal are inextricably linked with the shape of the future relationship.
"Both sides must be flexible and willing to compromise when it comes to solving areas where we disagree," said the Government source.
"As the EU itself has said, the clock is ticking so neither side should drag its feet."
Ukip accused Labour of "betraying" Brexit voters, including 1.5 million Ukip voters who are believed to have switched to Mr Corbyn's party at June's general election after he pledged to respect the outcome of the referendum.
"Jeremy Corbyn has finally capitulated to the Blairites and abandoned his principles of 30 years," said Ukip interim leader Steve Crowther.
"It's no coincidence that this screaming U-turn comes only four days before Tony Blair is due to visit his 'good friends' on the EU's negotiating team - presumably to assure them of Labour's willingness to raise the white flag at the earliest opportunity."
A Conservative spokesman said: "The truth is Labour have no idea what they want and this is a weak attempt to kick the can down the road.
"Their leader can't say they would end unlimited freedom of movement, they can't decide whether we are leaving the single market and they have no vision for what Britain should look like outside the EU.
"This week we will be heading out to negotiate a deal with the EU that avoids unnecessary disruption to people and businesses, and allows the UK to grasp the opportunities of Brexit. Labour are still arguing from the sidelines."
Mr Corbyn accused the Government of being "in confusion" over its Brexit strategy.
"It restarts the negotiation tomorrow and it seems to me that they are in danger of wandering into a cliff-edge Brexit," the Labour leader told Sky News in Edinburgh. "Ours is to protect jobs and protect working conditions in the transition."
Mr Corbyn said he did not know how long any transitional period would last, saying it would be "as long as is necessary but make it time-limited".
Asked whether the UK would continue to accept free movement and make payments into the EU budgets after March 2019 under Labour's plans, he said: "Obviously, we have got to work out what the arrangements are during the transition period and make sure we reach agreement on that.
"Quite clearly, the priority has to be protecting jobs and also understanding the needs of EU nationals that are living here."
Mr Corbyn said he could not say "at this stage" whether Labour's plan means the UK could remain in the customs union on a permanent basis.
"We need to reach an arrangement which protects the long-term trading relationship between Britain and Europe and jobs in this country, because all the manufacturing industries in Britain rely on a supply chain all across Europe," he said.
Former trade secretary and European commissioner Lord (Peter) Mandelson said Labour had "done Parliament and the public a big favour" by adopting a policy which could save Britain from the self-inflicted economic harm of an abrupt departure from the single market and customs union.
The shift in Labour's position gave Conservative MPs an opportunity to take "a meaningful stand" against hard Brexit in votes on the EU Withdrawal Bill in the autumn, he said.
Writing in the Financial Times, Lord Mandelson said Labour's move had exposed " the sheer impracticality and lack of grasp" of the Government's efforts to negotiate a bespoke transitional arrangement by March 2019 as a precursor to securing another tailor-made deal for the long term.
"Labour has created an opportunity for Britain to avoid inflicting on itself the economic costs inherent in the Government's chosen path," said the Labour peer.
"But achieving this depends on what others in Parliament do, including those on the Tory benches who know the risks of turning a crisis into an economic calamity. Given Labour's neutral stance to date, there had not been a chance to take a meaningful stand against it. Until now...
"Labour has done Parliament and the public a big favour in starting what will be a complicated debate. It should continue it with this autumn's EU Withdrawal Bill by establishing the clear principle that Britain should not decide to leave the EU and its single market until it knows just where it is leaving to."