Composite of Jeremy Corbyn and Theresa May Credit;AP/Getty
© AP/Getty

Senior Labour figures have cast doubt on the prospects of a cross-party Brexit deal as talks approach their final stages this week, with John McDonnell, shadow chancellor, saying prime minister Theresa May is not to be trusted.

Mr McDonnell said on Sunday that trying to reach an agreement with the Conservative government was like “trying to enter a contract with a company going into administration”.

The biggest challenge for Labour was negotiating with Mrs May when her premiership was nearing an end and all her potential successors were “virtually threatening to tear up” any deal, he added. “We’re dealing with a very unstable administration.”

A final round of negotiations between Labour and the Conservatives over Brexit is due to begin on Tuesday.

Some allies of Jeremy Corbyn, the Labour leader, are anxious about ending up in a “national government in all but name” but without any ministerial posts — sharing the blame for any Brexit fallout with the Tories.

Keir Starmer, shadow Brexit secretary, has repeatedly brought up the issue of a second referendum during the talks, warning that Labour will not be able to guarantee the support of its backbenchers without it. So far, the prime minister has refused to give way.

Mr Corbyn and Mr McDonnell are ambivalent about a second vote. But Tom Watson, the party’s deputy leader, told BBC Five Live that if there was no confirmatory referendum it would be a “deal-breaker” for many of his colleagues.

“It’s absolutely right that these talks continue but I don’t think we should be in any doubt that the Labour party membership and vast numbers of my colleagues in parliament don’t want us to just sign off on a Tory Brexit,” Mr Watson said.

“They don’t want us to bail the prime minister out of the problem of her own making and a very large number of our members think the people should decide on what that deal looks like.”

Mrs May said the results of Thursday’s local elections had sent a message to the two main parties to “put our differences aside” and work together. “Let’s do a deal,” she wrote in the Mail on Sunday.

Rory Stewart, the new international development secretary, insisted the two sides were almost in agreement after nearly a month of talks. “Our positions are a quarter of an inch apart,” he told Sky television. “I think a deal can be done.”

But one senior Labour MP said: “The reality is that we’re never going to get anything through parliament without a second referendum.”

Presenting a Brexit deal as a “grand bargain” between Labour and the Conservative government could split both parties. Instead, the two sides are discussing how elements of any deal could be agreed in a low-key manner and how it could be introduced to parliament, probably via the Withdrawal Agreement bill that is needed to ratify Mrs May’s exit deal.

One idea is to give MPs a series of “definitive votes” on different Brexit options, while another could be to change the Withdrawal Agreement to allow amendments such as votes on a customs union or a second referendum.

Although the prime minister insists she wants Britain to have a fully independent trade policy, the cross-party talks include plans for a customs arrangement with the EU.

Mrs May’s allies say this would not necessarily cover all trade areas, suggesting goods could come under the EU’s common external tariff. That would mean Britain applying EU tariffs to goods entering from third countries, removing the need for customs checks at British ports for trade going onwards to the bloc.

Other trade discussions include the alignment of single-market rules for goods, such as safety and environmental regulations, to avoid further paperwork at the border.

An independent British trade policy would then apply mainly to services, data, public procurement and other intangible items.

Both sides have made progress on enshrining EU standards on workers rights, including on a “dynamic alignment” whereby Britain could agree to incorporating new European legislation into domestic law.

Those close to the talks say the Conservatives have “put their foot on the pedal” in recent meetings with a view to completing Brexit by June 30. The prime minister recognises Britain will have to take part in European parliamentary elections on May 23, but she hopes to conclude the exit process before any newly elected British MEPs can take their seats in Strasbourg when the new chamber meets for the first time on July 2.

But Mrs May is facing her own party backlash from Eurosceptic members who want a no-deal Brexit. “If there is a compromise that turns out to be a kind of ‘Brexit in name only’ involving anything close to a customs union, there would be more than 100 Tory MPs who would never support it,” said Nigel Evans, executive secretary of the backbench 1922 Committee.

Labour is demanding that any deal is “Boris-proof” — that is, hard for a future Brexiter prime minister such as Boris Johnson to unravel. Although one parliament cannot bind the hands of another, legislation to enshrine the deal would make it harder to unstitch. A bill to include commitments on workers rights, the environment and consumers would help towards that end.

Nigel Farage, leader of the Brexit Party, said on Sunday that the UK public wanted to leave the EU without a deal. “If they push forward with this [agreement] it will be seen as a coalition of politicians against the people and I think millions of people would give up on both Labour and the Conservatives,” he told Sky News.

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