Theresa May under pressure as Labour makes U-turn on single market

Theresa May under pressure as Labour makes U-turn on single market
The Financial Times, by George Parker

27.08.17
 
Theresa May is facing renewed pressure from her own party over Brexit after Labour announced it would change tack and campaign to keep Britain in the EU single market, at least during a transitional period.

 

The move will embolden pro-European Conservatives to push the British prime minister towards a softer Brexit, as MPs prepare to debate next month the legislation that will put Britain’s departure from the EU into effect.

 

“Everything has now shifted to the arguments we have been making for some considerable time,” said Anna Soubry, the pro-European former Conservative business minister.

 

Another senior pro-Remain Tory said: “Colleagues will be wary of voting with Labour but the leverage among soft Brexit Tories has increased significantly. It might shift what the government is asking for.”

 

Labour hopes to push Mrs May, who has a working Commons majority of just 13, towards an EU transitional deal that extends Britain’s membership of the single market and customs union for several years.

 

Keir Starmer, Labour’s Brexit spokesman, suggested the transition should last up to four years after the UK leaves the union in 2019, potentially putting Britain’s future relationship with the EU up for grabs at the next general election, scheduled for 2022.

 

After months of confusion over its Brexit policy and fierce internal debate, Sir Keir wrote in the Observer that Labour now wants to maintain the status quo in Britain’s relations with Europe during the transition.

 

He said the time for “constructive ambiguity” was over, adding: “Labour would seek a transitional deal that maintains the same basic terms that we currently enjoy with the EU.”

 

In a further change of heart — partly driven by pressure from trade unions — senior party officials say Labour has not ruled out some form of single market relationship in the longer term if the EU relaxes its rules on free movement.

 

Labour would accept payments into the EU budget, free movement of people and the jurisdiction of the European Court of Justice during the transition as a price worth paying to ensure a smooth exit.

 

Number 10 said the new policy showed Labour had no idea what it wanted from Brexit and was “a weak attempt to kick the can down the road”.

 

The Labour shift will be welcomed by most people in business and reflects the Treasury’s view that British companies should face only “one transition”, when Britain moves from an interim regime to a final, settled state based on a proposed free trade agreement.

 

David Davis, Brexit secretary, will travel to Brussels on Monday for the latest round of exit talks. Michel Barnier, the EU’s chief negotiator, has insisted there can be no talks about a future relationship until “sufficient progress” is made on divorce terms.

 

The EU says any transitional deal must be “in the interests of the union”, but few member states are likely to oppose a time-limited interim phase in which Britain had to meet all its existing obligations but with no say or voting rights.

 

The government has said it will leave the single market and customs union at the point of Brexit, but this month said it would try to negotiate a new customs relationship with the EU during a transition, replicating the existing one.

 

However, it has not committed itself to staying in the single market, with its implied acceptance of all EU laws, regulatory bodies, budget contributions, free movement and the direct jurisdiction of judges in Luxembourg.

 

Chuka Umunna, Labour MP and leading supporter of the pro-EU Open Britain group, said he believed Labour leader Jeremy Corbyn’s move would “embolden” Tory MPs to mobilise for a softer Brexit.

 

“This is a most welcome announcement and a significant moment in the Brexit debate so far. A ‘jobs first’ Brexit is only possible through continued British membership of the single market and customs union.”