In a dramatic policy shift, the party’s shadow Brexit secretary Sir Keir Starmer announced a Labour government would abide by “the same basic terms” of Britain’s current EU membership during the transition, which some observers believe could last up to five years.
Sir Keir made clear the party is open to the possibility of negotiating new single market and customs union terms which the UK could sign up to on a permanent basis.
During the General Election earlier this year Labour had promised to seek to “retain the benefits” of the single market and customs union as part of a “jobs-first” Brexit, but Mr Corbyn has so far stopped short of committing to continued membership beyond the date of Brexit.
Mr Corbyn’s office has now confirmed that the proposals set out by the shadow Brexit secretary had been agreed with the party leader and are now official policy.
The Labour leader had been urged by members 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.
Sir Keir told The Observer that the Tory position, set out by Chancellor Philip Hammond and International Trade Secretary Liam Fox, of taking the UK outside the single market and customs union for the transition period would be “unnecessary and a highly risky path to take”.
He said: “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.”
And he 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.”
Responding to Sir Keir’s announcement, Labour peer and former minister Lord Adonis said on Twitter: “Chances of staying in the EU just rose to nearly 50%. Rejoice, rejoice!”
However, Sir Keir argued that under Labour, the transition period before the final shift to a new UK-EU relationship would be “as short as possible, but as long as is necessary”.
He added that 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”.
Critics of continued customs union membership argue that it would prevent the UK from striking new trade deals with non-EU countries.
But Sir Keir said it would ensure the continued flow of goods and services without the burden of additional red tape and tariffs during the transition.
The shadow Brexit secretary lashed out at his Tory counterpart, as he said David Davis’s ”fanciful and unachievable” proposals on customs showed that the Government was willing to take “colossal risks” with the economy and jobs.
He also accused Theresa May of having an “ideological obsession” with taking Britain outside of all of the EU’s structures in March 2019 mean that “the options to deliver a good deal for Britain are diminishing fast”.
The Labour Campaign for the Single Market, backed by Ms Alexander and Ms McGovern, is hoping to table a motion at the party’s annual conference in Brighton next month committing it to a policy of “unequivocal” membership of the market, customs union and EEA.
The group said: ”The Conservatives are putting the future of our country at risk. They are making a mess of Brexit and the Labour Party must stand up to them
“We need to act now to keep the UK in the single market and the customs union. This is the only way to protect jobs, tackle austerity and defend our rights.”
Labour MP Chuka Umunna, a leading supporter of the Open Britain campaign against a hard Brexit,has welcomed his party’s policy shift.
He said: “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.
“This will rightly pile the pressure on the Government to put membership of the single market and the customs union at the heart of their negotiating strategy. Anything else will be bad news for our economy, jobs, public services and social justice.”