When it comes to Brexit, Jeremy Corbyn and Theresa May have more in common than they think

Labour’s policy is to seek a ‘new and strong relationship with the single market’. Such ‘constructive ambiguity’ is designed to appeal to both Leavers and Remainers. But the vote on the single market will force Corbyn to come off the fence

At the two most recent sessions of Prime Minister’s Questions, Jeremy Corbyn has unnerved Theresa May with short, punchy questions about her non-existent policy on Brexit, which she cannot answer. The luxury of opposition means you don’t face the daily dilemmas of government, can ruthlessly expose bad decisions – and, in May’s case, her inability to take them when her cabinet and MPs are so divided.

However, Corbyn now has a big, difficult decision of his own to make – whether to support the UK staying in the EU single market after Brexit. The House of Lords has voted for it, by calling for the UK to join the European Economic Area (EEA). Some 83 Labour peers defied Corbyn’s edict to abstain by backing it, a foretaste of what is to come when the Commons debates the Lords’ decision before parliament’s summer break.

Labour’s policy is to seek a “new and strong relationship with the single market”. Such “constructive ambiguity” is designed to appeal to both Leavers and Remainers. But the vote will force Corbyn to come off the fence.

Whatever he does, it will be impossible to unite his MPs. An estimated 70 will rebel if he trusts his eurosceptic instincts and does not support single market membership. But if he bows to pressure from pro-European party members, trade unions, MPs and peers, Corbyn will provoke a revolt by MPs representing areas that voted Leave in the 2016 referendum. Two-thirds of Labour-held seats backed Brexit.

Corbyn aides are convinced that a tougher stand against Brexit might result in a few gains in pro-Remain areas at the next general election, but they would be heavily outweighed by losses in Leave land. They point to the Tories’ better performance here in this month’s local elections in England, warning that the Tories would exploit a Labour commitment to single market (and by extension free movement) in key marginals in the North and Midlands.

Setting out his reservations about the single market in February, Corbyn said Labour would “seek to negotiate protections, clarifications or exemptions, where necessary, in relation to privatisation and public service competition directives, state aid and procurement rules”. Unfortunately, Chris Grayling, that well-known socialist, has just blown a hole in his argument by renationalising the East Coast rail line (again).

In fact, there are reasons why the single market should appeal to the Labour leader. The trade deal the government strikes with the EU will mainly cover goods, while the EEA option would include services, which account for 80 per cent of the economy. If services are exempt, investment and jobs will be lost and Labour’s traditional working class base will be worst hit. The government’s own forecasts show the Northeast and West Midlands would see the biggest slowdown in growth. Tax revenues would fall, limiting what the nation could afford to spend on vital public services, already facing huge demographic pressures. That gives Labour pro-Europeans a powerful argument: the single market route is in the national interest, which should override the party’s. They believe the UK’s economic clout would enable it to negotiate a good EEA deal, including some limits on free movement (already allowed under EU rules but not taken up by the UK).

Which way will Corbyn jump? Close aides predict he will trust his gut feeling: staying in the single market would be seen as not honouring the referendum and would leave the UK as a “rule-taker, not rule-maker”. One said: “He won’t budge.” However, some Corbyn allies believe there is an outside chance he will embrace the single market, saying it will “depend on the numbers” in parliament. He would love to inflict a humiliating defeat on May that plunged the Brexit process into turmoil, which just might trigger a general election. (The Fixed-term Parliaments Act makes that unlikely, but we can’t blame Corbyn for wanting to try).

To defeat the government on the single market, Corbyn would need the votes of his MPs and about 12 pro-EU Tories. Although a number of Tories have expressed sympathy for the EEA option, it does not mean they would back it in a crunch vote. They are more likely to concentrate their fire on a customs union. So is Corbyn, because Labour MPs are broadly united on that, giving him a strong chance of defeating the government. If he votes for the single market, he will have a rebellion on his hands, and so might not win the prize of a Commons victory.

Although he rightly mocks May for her indecision on Brexit, Corbyn may soon find himself taking a leaf out of her playbook. “C” is for kicking the can down the road, which she is now doing on customs to prevent the EU negotiations collapsing over the Irish border issue. So Corbyn might be tempted to postpone his tricky decision on the single market until the autumn, when the Commons is due to vote on the Brexit deal and other options will be in play, including rejecting it and calling a referendum. The two main party leaders have more in common than they would admit.