A few weeks ago, Theresa May took the option of the UK remaining in a customs union with the EU off the negotiating table. Jeremy Corbyn has put it back on. The opposition leader announced on Monday that he is in favour of brokering a close relationship with the bloc for trading goods. This is a welcome departure from the Labour party’s “constructive ambiguity” on Brexit. It matters not whether Mr Corbyn has changed his mind simply to undermine the prime minister. His move could ultimately serve the national interest.
Mr Corbyn is right to say that protecting the UK’s goods trade relies on maintaining the current customs arrangements and preserving pan-European supply chains. He is also correct in his assertion that a customs union, reinforced by regulatory alignment, is key to maintaining a soft border with the Republic of Ireland. The Conservative party’s fixation on a clean break with the bloc forces it to ignore or wish away these two inconvenient facts.
Some of Mr Corbyn’s demands are unrealistic. Brussels is unlikely to agree to a watering down of state aid rules in any trade deal with the UK. His insistence that Britain would require a voice in any future EU trade deal with third parties is optimistic. It flies against the EU27’s insistence that a nation is either in the bloc with a voice, or out. Turkey has a customs union with the EU. It does not have a say in trade. Britain is not Turkey, however. A solution might be possible if the UK came up with a new kind of customs union.
Pro-European Labour MPs have welcomed Mr Corbyn’s stance. They want him to go further. Some believe the party should support continued membership of the single market, too. This might be economically optimal, but it is politically difficult. As well as forcing the UK to accept a much greater range of EU rules, it would mean continued free movement of people. Immigration was a mobilising force in the Brexit referendum. If tighter border controls were not part of Britain’s future relationship with the bloc, a large part of the electorate would feel betrayed.
The broader point is that Britain’s political discourse has become warped. Mr Corbyn, an unreconstructed socialist who favours mass nationalisation and is preparing for a run on the pound if elected to office, is speaking more to the needs of the British economy than Mrs May’s traditionally pro-business Conservative party. Instead of listening to business, the Treasury and the City of London, the prime minister has been preoccupied with the views of a hardline minority of MPs, who desire a hard exit from the EU at all costs. Mr Corbyn and his hard left coterie pose a greater threat to the UK’s growth prospects than all but the worst Brexit outcomes. Yet the CBI, the employers federation, has endorsed Labour’s new position on the customs union.
The prime minister may be forced to change course. For Mr Corbyn’s new stance to mean anything, it will require the co-operation of a dozen or so Conservative MPs. At some point over the next few months, the House of Commons will vote on an amendment to the trade bill, concerning a customs union. The May government cannot be certain of winning this vote. It might attempt to bully wavering MPs into submission by making a vote on the customs union a confidence issue — the equivalent of a political nuclear weapon.
This would be a disservice to those who voted in good faith to leave the EU. There was no particular form of Brexit on the ballot paper in June 2016. Britain should maintain a customs union in the interests of the economy. If Mrs May does not change tack, Tory MPs should work with Labour to make it happen.
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