Labour ready for 'political hit' after backing remaining in the single market after Brexit

The move will mean the party would retain free movement for several years after leaving the EU

Shadow Brexit Secretary Keir Starmer said it was the ‘least worst option’ for the economy (Getty)

The architects of Labour’s Brexit policy have said they are ready to take a “political hit” after their plan to keep Britain in the single market after EU withdrawal exposed divisions at the top of the party.

Allies of Shadow Brexit Secretary Keir Starmer accepted their proposal would mean the party is accused of wanting to keep the EU free movement many Labour voters oppose, but said it was the “least worst option” for the economy and critical to safeguarding jobs.

But others at the top of the party branded the move “unwise” and warned it would be “incredibly damaging” in Labour voting areas that had backed Brexit in a bid to reduce immigration.

Sources close to leader Jeremy Corbyn sought to keep the two sides together, claiming the announcement was not a shift, but a development of the “sensible, pragmatic position” outlined in the party’s election manifesto.

It comes as Brexit Secretary David Davis prepares for a further round of talks in Brussels on Monday in which he will call for “flexibility and imagination” as he tries to make progress in discussions that appear stalled.

Mr Starmer’s announcement that Labour would back the UK remaining in the single market and customs union during a transition period heaps pressure on Theresa May, who knows that there will be some Tories who support it.

But Labour’s Brexit team is acutely aware that the move to provide more clarity also leaves them exposed to attack from within, particularly over the vexed issue of EU immigration.

One source told The Independent: “There is going to be a political hit, we know, because what we’ve said we want means we'll be accused of accepting free movement and the European Court of Justice during that transition period.

“We accept that’s not helpful and know that it is the least worst option in those senses, but it is also the safest option in terms of protecting the economy and jobs.”

The Starmer ally went on: “Keir has said in the past that we would want the same basic terms as now during a transition, but has not spelt out exactly what that means.

“This is the first time that we are saying that during the transition it means we would stay in the single market and a customs union and it does draw a clear line between us and the Tories.”

The announcement on Sunday gave more clarity than any party has given to date about its approach to the transition period, which could last two or three years, between Brexit day and adopting new trading arrangements with the EU.

But it was surprising because until now it has been the lack of clarity that has allowed both major parties to more easily deal with internal splits over how to approach Brexit.

In a piece written for The Observer, Mr Starmer admitted staying in the single market during the transition would mean abiding by its “common rules”, or in other words, accepting free movement and the jurisdiction of the European Court of Justice.

It appeared to be a significant win for the wing of the party fighting for closer ties to Europe, which has also recently been buoyed by polling showing Labour could have benefitted from being seen as the party of soft Brexit during the election.

But senior figures fear the announcement also reflects a growing belief in the party that Labour voters who backed Brexit in 2016 no longer consider it important, and are now more enthused by Mr Corbyn’s anti-austerity agenda.

One individual warned that there is still a real risk of a backlash from voters in Labour’s Brexit-voting heartlands, against both the party and the leader himself.

Jeremy Corbyn is working to unify his party round a single Brexit position (AFP/Getty)

The person said: “It’s going to be an incredibly damaging thing that they’ve done. It’s unwise.

“It’s going to cause us problems in the South West, in the North and East of England where people voted for Brexit. It’s the whole thing of giving the impression that somehow we are only half-hearted about it.”

The source added that despite advances made at the ballot box, Labour was still not in a position to start disregarding the views of its leave voters.

“There was a sense in white working class areas, that there was not the enthusiasm for Jeremy that there was in other areas, and there won’t be enough young metropolitan voters to win us a majority,” the source said.

“When the Brexit-voting white working class sees this, they are not going to warm to it.”

Aware of the sensitivity around the announcement, Mr Corbyn’s aides sought to play down its significance on Sunday, pointing instead to how the party had come together since the election.

A source in the leader’s office said: “This is not a dramatic shift. For some time we have been talking about keeping the same basic terms during the transition period and so this is in line with that.

“But it does draw a dividing line with the Tories, who either back a cliff-edge position like Jacob Ress Mogg and Liam Fox back, or the Chancellor’s [Philip Hammond’s] position which sees the need for a transition, for which they want to negotiate basic terms with very little time.

“We have said we want the same basic terms as now, so our transition is the sensible, pragmatic position.”

Asked in a TV interview whether the UK would continue to accept free movement after March 2019 under Labour's plans, Mr Corbyn said: “Obviously, we have got to work out what the arrangements are during the transition period and make sure we reach agreement on that.

“Quite clearly, the priority has to be protecting jobs and also understanding the needs of EU nationals that are living here.”

What Labour wants from the final Brexit deal in terms of the single market remains the “fullest possible access”, without more detail about how this would be achieved.

A Conservative spokesman said: “The truth is Labour have no idea what they want and this is a weak attempt to kick the can down the road.

“Their leader can't say they would end unlimited freedom of movement, they can't decide whether we are leaving the single market and they have no vision for what Britain should look like outside the EU.”

But Conservative Brexit Secretary Mr Davis has also courted what he called “constructive ambiguity” in his approach to Brexit, claiming he chooses to keep his full ideas for Britain’s post-withdrawal future secret as a negotiating tactic.

That has not stopped many in the EU suggesting his plans are secret because they are not conclusively formed, with one official suggesting last week that the UK was even guilty of “magical thinking” about what it could achieve.

Mr Davis is expected to say at the outset this week: “We want to lock in the points where we agree, unpick the areas where we disagree, and make further progress on a range of issues.

“But in order to do that, we'll require flexibility and imagination from both sides.”