Conservative MPs have sought legal advice about the prospect of Theresa May losing a parliamentary vote on a post-Brexit customs union as Jeremy Corbyn made clear that it had now the support of Labour, the Guardian understands.
The opposition leader attempted to outflank the Conservatives with the business community by promising to place such an arrangement firmly on the table in a speech on Monday that won the cautious backing of industry representatives.
Corbyn’s suggestion that Labour would pursue “a new, comprehensive UK-EU customs union” after Brexit was praised by the Confederation of British Industry (CBI) and the Institute of Directors (IoD), as well as the former Conservative chancellor George Osborne. He claimed the Tories had offered Labour an “open goal” by making no customs union a red line and Corbyn had “just kicked the ball into the back of it”.
The development places May on a collision course with a number of her remain-supporting backbenchers, whose amendment to the trade bill calling for the government to pursue a customs union will now have the backing of the entire Labour party.
The government has already moved to delay the vote until after May’s local election because of fears that it cannot be won.
And now, in a sign of further concern about the impact of a defeat, senior Brexit Tory MPs have sought advice on whether the amendment is legally binding to assess whether May could accept it without having to fulfil its demands.
Other MPs, who previously backed remain, are expecting May to shift her position slightly in a speech on Friday laying out the UK’s opening gambit in negotiations for a future trade deal.
A message from one lawyer suggested that the wording – which calls for it to be a government “objective” to ensure Britain can participate in a customs union after leaving the EU – is sufficiently vague. They said the prime minister could accept it but then argue that the outcome was not achievable in negotiations.
The prime minister also spoke to the Irish taoiseach on Monday and they agreed they wanted the three options for the Irish border agreed in December “to be examined in detail”. Leo Varadkar pressed upon the prime minister the need to have the third “backstop” option of “full regulatory alignment” north and south of the border “spelled out in the draft legal text of the withdrawal agreement” which is going to be discussed as a key meeting of EU27 permanent representatives in Brussels on Wednesday. Whitehall sources made clear that this issue was causing an even bigger headache for the prime minister than the customs vote.
Fleshing out Labour’s Brexit policy in a speech designed to put clear blue water between the party and the Conservatives, Corbyn told an audience at Coventry University:
His party supported a “new and strong relationship with the single market” but would seek “protections, clarification or exemptions” in relation to Labour policy on nationalisation and state aid.
Free movement would end after Brexit “as a statement of fact”, but Labour would put jobs and the economy ahead of “bogus immigration targets”.
May’s government had kept voters in the dark over what it was seeking from Brexit: “Anything agreed at breakfast is being briefed against by lunch and abandoned by teatime.”
Labour’s customs union policy would prevent Britain from signing independent trade deals, but Corbyn insisted the UK should still be involved in EU-wide negotiations.
“A new customs arrangement would depend on Britain being able to negotiate agreement of new trade deals in our national interest,” he said.
“Labour would not countenance a deal that left Britain as a passive recipient of rules decided elsewhere by others. That would mean ending up as mere rule-takers.”
Carolyn Fairbairn, the CBI director general, said Corbyn’s commitment to a customs union would “put jobs and living standards first by remaining in a close economic relationship with the EU”, although she questioned the “rhetoric on renationalisation”.
Stephen Martin, the director general of the IoD, which is calling for a partial customs union, said Labour had “widened the debate” and manufacturers would be particularly pleased. However, Martin said there were no easy solutions and it was hard to see the EU extending its trade agreements to a sizeable non-member state without revising treaties.
However, Adam Marshall of the British Chambers of Commerce said Corbyn’s intervention felt “more political than practical for business”.
Senior Tories including Boris Johnson and Liam Fox accused Labour of betraying millions of leave voters. But Corbyn said: “Our message has been consistent since the vote to leave 20 months ago. We respect the result of the referendum.”
In a question and answer session after the speech, he was pressed on his insistence that Britain must retain a say in future trade deals.
Asked if Labour could live with only “a right to be heard”, rather than a right to vote or veto, he said: “What we want to achieve and what we will achieve is our right to be able to negotiate and consult at the same time in the European Union on the sort of trade agreements we make. And also to influence them on the sort of trade deals made in the rest of the world,” he said.
Corbyn argued that seeking fresh deals with China or the US was not something Labour wanted to pursue, as that would not compensate for the loss of trade with EU countries.
“Both the US and China have weaker standards and regulations that would risk dragging Britain into a race to the bottom on vital protections and rights at work,” he said, arguing against a TTIP-style deal that could force open parts of the NHS or any new rules that would mean asking “the British public to eat chlorinated chicken”.
Jacob Rees-Mogg, who chairs the European Research Group of Brexit-supporting Tory MPs, said Labour had scored an own goal because, under its policy, Britain would not be able to veto future trade arrangements with third countries.
“Labour now risks a TTIP-style deal opening up the NHS to American companies,” he said. “The UK will only have observer status so it lets down Labour’s historic position in favour of the NHS.” He argued that staying in a customs union but outside the single market would also mean checks on the border in line with Turkey’s arrangement, and so would prevent frictionless trade.
Corbyn’s position on the customs union was widely welcomed by Labour backbenchers, who believe the UK should stay as close as possible to the EU after Brexit. However, Corbyn’s suggestion that Labour would want single market exemptions to help protect its ability to bring in certain domestic changes is likely to be opposed by some of his MPs.
Asked what Labour policy he was concerned about, Corbyn pointed to the “natural monopoly” of the postal and water industries, and said he felt “competition rules” went too far.
Alison McGovern, the MP who jointly runs a Labour campaign for the single market, said: “State aid rules didn’t stop us nationalising Railtrack or making Welsh Water a mutual. We all want Royal Mail out of private hands. And most other EU countries have state-backed industry.”