Labour backs new single market deal with the EU in major Brexit policy shift

Jeremy Corbyn will table an amendment to the government's Brexit legislation calling for a bespoke European Economic Area-style deal. 

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Labour is to table an amendment to the EU Withdrawal Bill calling for the government to negotiate "full access to the internal market of the European Union" after Brexit.

In a major shift in tone ahead of the return of the legislation to the Commons next Tuesday, the party has released the text of an amendment that effectively calls for a European Economic Area-style relationship with the EU's single market. 

The amendment reads:

It shall be a negotiating objective of Her Majesty's Government to ensure the United Kingdom has full access to the internal market of the European Union, underpinned by shared institutions and regulations, with no new impediments to trade and common rights, standards and protections as a minimum. 

The announcement of the amendment – tabled in the name of Jeremy Corbyn – follows weeks of speculation as to how the party would whip on a Lords amendment which called for Britain to continue to participate in the EEA after Brexit. 

Keir Starmer, the shadow Brexit secretary, said Labour was seeking a bespoke agreement rather than a Norway-style deal:

“Existing single market agreements that the EU has negotiated with third countries, including Norway, are bespoke deals negotiated with the EU to serve the best interests of those countries. We need to learn from them and negotiate our own more ambitious agreement, which serves our economic interests and which prevents a hard border in Northern Ireland.

“Two years on from the referendum it is clear that the government has no plan for how it will protect jobs and the economy, and guarantee no hard border in Northern Ireland.

“Labour’s amendment, along with a commitment to negotiate a new comprehensive customs union with the EU, is a strong and balanced package that would retain the benefits of the single market. Parliament should have the opportunity to debate and vote on it.”

Just how significant the announcement is will depend on the political consequences that follow. The first question is how Labour will now whip on the existing Lords amendment on the EEA, which had threatened to spark a major rebellion from MPs unwilling to vote against or abstain, and whether the new amendment will stave off said rebellion.

The second is whether the amendment has any chance of passing even if its rejection of Norway-style EEA membership is enough to win the support of Labour MPs from Leave seats, and whether Conservative rebels, who are inclined to back the Lords amendment, can be convinced to back an amendment in the name of Jeremy Corbyn and the Labour frontbench, which is typically a much harder ask.

It is also unclear how Starmer will square the party's pledges on ending the free movement of people, and that the UK must not be a rule-taker post-Brexit, with the sort of economic relationship defined by the amendment.

The immediate response of some pro-EU MPs suggests it is unlikely to do so – or prevent a rebellion on the Lords amendment. Wes Streeting, the Ilford North MP, urged the leadership to back the Lords amendment. He said: "I support the front bench amendment, but we have to be honest that there is no chance of this securing a majority. None. Zero. The Alli amendment CAN pass - there are enough votes - IF and only if the Labour front bench moves on this."

Chuka Umunna, speaking on behalf of the Open Britain campaign, said: “The only way of realising the objectives set out in the amendment, short of EU membership, is through the UK being part of the European Economic Area, as a minimum.

“All the way through the passage of this Bill, the only amendments which have commanded support on both sides of the House and passed are cross party backbench ones. So, if we are serious about ‘protecting full access to the internal market of the EU’ and ensuring ‘no new impediments to trade’, logic dictates Labour MPs should be whipped to support the cross-party EEA amendment sent to us by the House of Lords.”

So while undoubtedly a major shift for Labour, it remains to be seen whether there will be major consequences for the government next Tuesday – or whether the net effect of the amendment could instead be a reprieve on the EEA.

Patrick Maguire is the New Statesman's political correspondent.