Labour must say it: Britain should stay in the single market after Brexit

  • Conservative pressure is growing for Theresa May to walk away with no deal. To protect working people from this disaster, Labour needs to act now

  • Chuka Umunna MP

The Brexit negotiations have thus far amounted to a series of humiliating U-turns by the Conservative government. After 18 months of cabinet disputes and posturing over the terms of the divorce, the prime minister has been forced to drop almost every one of the unsustainable red lines she set out at Lancaster House back in January.

As we approach the talks over the future relationship with the EU, it is clear that the biggest climbdowns lie ahead. Since the government foolishly ruled out membership of the single market and the customs union, the EU has been clear that the least worst relationship we can now hope for is a Canada-style free trade agreement, a terrible prospect. As TUC general secretary Frances O’Grady has said, a Canada-style agreement will hurt working people and allow foreign investors to sue the government if its activities threaten their profits, creating incentives for further privatisations. After seven years of Tory austerity, the last thing our economy and our public services need is to cut ourselves off from our largest trade partner and yet more privatisations.

As the reality of all of this begins to bite, the pressure on the prime minister from her backbenchers to blame anyone but themselves, and to walk away with no deal, will grow. But this is not inevitable. It is not too late for the Labour party to force a change of approach, as we have so often done over the decades to protect working people and advance social justice. In fact, we have a duty to do so because the struggle to reduce inequality and poverty, which drove me to join the party, and the battle to stop a Tory Brexit are two sides of the same coin.

Jeremy Corbyn and Keir Starmer did the right thing at the end of the summer calling for a transition period of up to four years inside the single market and the customs union after Brexit. It is the only framework available to the UK during the transition given that the EU has made it clear there is insufficient time to put in place an alternative. Before the party’s change in position both the TUC and the CBI had been calling for many weeks for a transition period on this basis to protect jobs and allow businesses to plan ahead. It was also becoming abundantly clear that the prime minister was going to have to change course and agree to a transition period in all but name under the framework of rules governing the single market and customs union. She called it an “implementation period” in her Florence speech in September and bowed to the inevitable. Had our party’s position not changed just a few weeks beforehand, we would have been left stranded.

Since the summer our front bench have moved further. Jeremy Corbyn called this week for the scheduled exit day to be delayed until after March 2019 if it allows the government to secure a better deal, which is very welcome, and recently our front bench quite rightly urged the government to put the option of remaining in both the single market and customs union permanently after transition “on the table”. After all, the single market is a framework of rules that protects people from unfettered capitalism, in addition to easing trade across the continent. Being outside the customs union would mean masses of new red tape, a desperate scramble for trade agreements and the re-emergence of a border in Ireland. Most importantly, staying in both are good anti-austerity policies – keeping revenue coming into the exchequer to invest in public services.

But the time has now come to go further and to not simply keep these options on the table but fully commit to membership of both in the longer term. It is clear why the Tories want to rule both out and pursue a hard Brexit. They believe the pain it will inflict on working people will be worth it. The environmental and food standards that are requirements of our membership of the single market will suddenly be free to be chipped away at. Britain will be free to negotiate free trade agreements independently with the likes of Donald Trump. The drawbridge can be pulled up to restrict migrants from coming to contribute to our economy and our society. And as the economy deteriorates, the labour market can be deregulated and corporation tax slashed further still, turning Britain into a Singapore-on-Thames.

For Labour, these are not things to welcome, but to fear. But our attack on the Tories is severely compromised by our constant prevarication on this issue. A sensible period of transition is necessary but it is no safe harbour – it simply delays jumping off the cliff. And we should not kid ourselves – there are no upsides to leaving the single market and the customs union after transition. There are only downsides. Rules on state aid will apply whether we have single market membership or a free trade agreement – the EU’s negotiating guidelines are absolutely clear about this. There are not dozens of free trade agreements waiting to be struck the moment we leave – and even if there were, would they be on terms that we as a party could support? And as for the promised boost to the NHS, it is abundantly clear that a hard Brexit will be devastating for the health service.

Having common European standards has not only boosted prosperity here and across the continent, it is undoubtedly the best way of managing the challenges posed by globalisation. Whether it is clamping down on tax avoidance by multinationals, setting ambitious targets for tackling climate change, or reforming the posted workers’ directive to better protect migrant workers, European countries are working together to get things done. Meanwhile, this Tory government is sitting on the sidelines.

Finally, we risk falling behind events not shaping them. It may transpire that Theresa May is forced to permanently accept the rules of the single market and customs union if it is the only way to resolve the unresolved Irish border issue. The agreement reached at the end of last week said: “in the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the internal market and the customs union which, now or in the future, support North-South cooperation.” No business or EU government I have spoken to believes there is any other way of avoiding a hard border in Ireland that the “full alignment” referred to.

TSSA general secretary Manuel Cortes has called on our party to “be bold and continue to develop the new narrative to guide our nation’s ship to safe harbour away from Brexit’s choppy waters.” He is right. Now is the time to lead the debate, commit to staying in the single market and customs union permanently, and to working with our sister parties across Europe for further radical change. Labour MPs have the opportunity to vote this week to ensure the government can’t wrench our country out of the single market without the authorisation of parliament. If we are serious about fighting the Tories’ cynical agenda, delivering a jobs-first Brexit and reversing austerity, we must seize that chance.