Keir Starmer has said Labour is prepared to consider ongoing payments to the EU and accept the “easy movement” of workers in order to secure the benefits of the single market and customs union.
The shadow Brexit secretary said his party’s ambitions for a close economic relationship with the EU also meant continued alignment of regulations and standards.
He accepted that Labour was seeking something that would look like a “Norway style agreement for the 21st century”. And although he was clear that the party was not calling for a second referendum, he would not fully rule it out in the future.
Speaking about what type of Brexit Labour wanted, Starmer said: “Do we want full participation of the single market? Yes we do. Do we want the full benefits of the customs union? Yes we do.”
Speaking on the BBC’s Andrew Marr show, he said the party’s starting point would be viable options such as “staying in a customs union and a single market variant which means full participation of the single market”.
Addressing the fact that the free movement of workers is one of the four freedoms linked to the single market, often described as indivisible, Starmer said rules on immigration could not stay the same.
However, he added: “The end of free movement doesn’t mean no movement. Of course we would want people to come from the EU to work here, we would want people who are here to go to work in the EU.” Asked if that was best described as “easy movement if not free”, he replied, “yes, of course”.
Starmer also accepted that Norway pays in money, saying: “There may have to be payments that has to be negotiated.”
On regulations, he said: “What underpins access to the single market and customs union is a level playing field – if you want the benefits you have to stay on the same level playing field. The Labour party doesn’t have a problem with that.
“We don’t want to deregulate. We don’t want to cut workplace, environmental rights. We are very comfortable staying on a level playing field.”
What are Brexit options now? The four scenarios
If the UK has a change of heart, it could sign up to all the EU’s rules and regulations, staying in the EU’s single market and customs union. Freedom of movement would continue and the UK would keep paying into the Brussels pot. We would continue to have unfettered access to EU trade, but the pledge to “take back control” of laws, borders and money would not have been fulfilled. This is an unlikely outcome and one that may be possible only by reversing the Brexit decision, after a second referendum or election.
Britain could follow Norway, which is in the single market, is subject to freedom of movement rules and pays a fee to Brussels – but is outside the customs union. That combination would tie Britain to EU regulations but allow it to sign trade deals of its own. A “Norway-minus” deal is more likely. That would see the UK leave the single market and customs union and end free movement of people. But Britain would align its rules and regulations with Brussels, hoping this would allow a greater degree of market access. The UK would still be subject to EU rules.
A comprehensive trade deal like the one handed to Canada would help British traders, as it would lower or eliminate tariffs. But there would be little on offer for the UK services industry. It is a bad outcome for financial services. Such a deal would leave Britain free to diverge from EU rules and regulations but that in turn would lead to border checks and the rise of other “non-tariff barriers” to trade. It would leave Britain free to forge new trade deals with other nations. Many in Brussels see this as a likely outcome, based on Theresa May’s direction so far.
Britain leaves with no trade deal, meaning that all trade is governed by World Trade Organisation rules. Tariffs would be high, queues at the border long and the Irish border issue severe. In the short term, British aircraft might be unable to fly to some European destinations. The UK would quickly need to establish bilateral agreements to deal with the consquences, but the country would be free to take whatever future direction it wishes. It may need to deregulate to attract international business – a very different future and a lot of disruption.
Starmer insisted that Theresa May’s deal, struck last week over divorce arrangements for Brexit, had set her government on track to also want to replicate the benefits of the customs union and single market.
He said that she was being unrealistic when she said that leaving the two blocs remained a red line alongside a promise for a soft Irish border.
“You can’t sweep the customs union and the single market off the table on the one hand and also say you don’t want a hard border in Northern Ireland,” said Starmer. “And that is exactly the conclusion of the negotiations this week.”
Those around Jeremy Corbyn are nervous about Labour becoming too committed to the single market because of fears that it could have a knock-on effect in some of the party’s key heartland constituencies, where there was a large majority to leave the EU.
The leader himself has argued that membership could prevent Britain from taking advantage of Brexit by spending money on state aid, for example.
It came as the SNP’s Westminster leader, Ian Blackford, called on Corbyn to get behind efforts to keep Scotland and the UK in a European single market and customs union to protect jobs.
Calling for a meeting to discuss a joint approach, the MP for Ross, Skye and Lochaber urged the Labour leader to put aside party politics and secure a parliamentary majority for the move.
He said Labour needed to “stop equivocating”. “We are now at a critical point in the Brexit negotiations. Extreme Tory plans to drag the UK out of the single market would cause economic catastrophe – costing the country hundreds of thousands of jobs, and hitting people’s incomes, livelihoods and living standards for decades to come,” he said.
The Scottish National party leader, Nicola Sturgeon, also pressed Corbyn on the issue.
“I think the majority exists in the House of Commons if Labour gets its act together, and I think the majority exists across the whole of the UK to stop that happening. The sensible compromise option and the least damaging option for our economy is to stay within the single market and the customs union so everyone who is of that view should come together and make that happen,” she said at first minister’s questions last week.
This latest intervention reflects a growing confidence among the SNP leadership that they can rebuild support for the Scottish government’s stance on Brexit, after linking it directly with a second independence referendum proved so damaging in June’s general election.
The SNP assumes that special terms for Northern Ireland will fuel public anger that the Conservatives have no mandate to enforce a harder line for Scotland, given the country’s majority support for remain and continued consensus that preserving the closest possible economic ties with Europe is the most desirable outcome.
Both Sturgeon and Blackford’s calls for the devolved governments to be more fully involved in negotiations at stage two indicates a continuing frustration that Scotland has been sidelined in Brexit discussions so far, and most keenly felt now that expected talks on joint frameworks at the joint ministerial committee this week in London will have been superseded by the new regulatory framework agreed by May on Friday.