Inside the Brexit battle to keep Britain in the single market

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  • Conservative and Labour MPs who are fighting to keep Britain in the European single market tell Business Insider the battle can still be won.
  • Both the prime minister Theresa May and Labour leader Jeremy Corbyn have opposed continued membership of the European Economic Area which would allow Britain to stay in the single market.
  • However, Conservative and Labour rebels are piling on the pressure inside parliament for a change of course.
  • May has already suffered a series of parliamentary defeats on Brexit.
  • Corbyn is under intense pressure from Labour MPs, councillors and activists, to back a softer Brexit.

LONDON – There is a growing feeling among pro-EU MPs that the battle over Britain’s post-Brexit future is now turning in their direction.

In recent weeks Theresa May’s government has suffered a growing series of parliamentary defeats on Brexit with backbench Conservative Brexiteers becoming increasingly vocal about their fears that May is losing the battle for a hard Brexit.

Now buoyed by the expectation that MPs will vote for Britain to stay in a customs union with the European Union, leading Remain campaigners are starting to eye up their next prize: staying in the European Economic Area.

By remaining inside the EEA after Brexit – commonly described as the “Norway model” – Britain would retain full, tariff-free access to the single market while fulfilling May’s commitment to leave the EU. For many pro-EU MPs it is the best way to respect the referendum result while preventing serious economic damage from Brexit.

The issue came to a head last week when the House of Lords voted for an amendment which could force the UK government to pursue a Norway-style Brexit. Now MPs will have to decide whether to approve it.

The Labour leadership has so far been reluctant to support calls to stay in the EEA. However, ahead of the House of Commons vote soft-Brexit campaigners have been pumping their energy and resources into persuading MPs from all parties to embrace a Norway-style Brexit.

At the time of writing, activists for the Open Britain campaign had sent 8,815 emails to 637 MPs urging them to back the amendment. “MPs have complained to us that they’re getting deluged,” a leading activist told Business Insider. On the eve of the Lords vote, a squad of Labour MPs including Chuka Umunna and Chris Leslie spent a weekend ringing up House of Lords peers, urging them to back the amendment and breathe new life into the cause.

Inside the Commons, the pro-EEA movement is gathering pace.

“It’s being talked about a lot more,” Conservative MP Nicky Morgan told BI. Morgan is one of more than dozen Tory MPs who are preparing to vote for the amendment. “It has been talked about by MPs for many, many months but without any real success in terms of getting the government interested in it. The Lords have put it back on the agenda in a way that it hasn’t been over the last two years.”

Nicky MorganGettyNicky Morgan MP.

Morgan is right that Westminster politics appears to be turning in her direction. In April, the parliamentary Brexit committee advised May to adopt the Norway-model as her official Brexit fallback option. More recently, MP George Freeman – who used to head May’s policy unit – said it’s “surely time to start looking” at staying inside the single market via EEA membership. Last week, Norway’s prime minister, Erna Solberg, drizzled fuel over the flame when she said the country was open to Britain joining the European Free Trade Association, which would be Britain’s ticket into the EEA as a non-EU country.

Pro-EEA MPs know they have lots of work to do to transform this recent momentum into a parliamentary victory. BI has been told that around 15 Conservative MPs are prepared to back the amendment, while at least 70 Labour MPs are ready to get on board. But even with these numbers, any vote would still fail unless the Labour leadership came on board.

Indeed MPs pushing for the EEA realise their cause hinges largely on the Leader of the Opposition, with Jeremy Corbyn yet to confirm how he will instruct Labour MPs to vote on the amendment. Inside Labour, an almighty battle is brewing.

“Complete b*******, total nonsense”

Last week, Corbyn frustrated pro-EU Labour MPs such as Umunna, Leslie and Alison McGovern and others – who coordinate on a private Whatsapp group called “Beyond Article 50” –when he suggested he does not support the Norway model in its current form. Corbyn and his inner-circle have two chief concerns about the single market: Firstly, they believe it would prevent a Labour government from nationalising key industries, and secondly, they claim Britain would be forced to accept rules which it would have little say in shaping.

Umunna, the MP for Streatham, rejected both claims when he spoke to BI last week. “The fact that the government has to intents and purposes, just nationalised the east coast mainline whilst we are part of the EEA, is the ultimate rebuttal of any notion that the EEA would stop us doing public ownership and nationalisation.”

He added: “And the crude claim that we’d be a rule receiver is just wrong.

“As a member of the EEA, you sit on the committees that draw up the rules which apply in the EEA and if EEA members unanimously decide they do not want to apply rules to their jurisdiction, then they can decide not to do so.”

One pro-EU Labour MP who wished to remain anonymous claimed that Corbyn is not concerned about how being in the single market restricts his 2017 manifesto pledges on public ownership, but rather how it could limit his plans for more radical nationalisation policies at the next election. “It’s not about what it would mean for the 2017 manifesto, it’s about what it would mean for the 2022 manifesto,” they told BI.

Labour leader mp jeremy corbynJack Taylor/Getty ImagesLabour Leader Jeremy Corbyn.

However, all is not lost for Umunna and co, in spite of Corbyn’s remarks. Last week, Shadow Brexit minister, Paul Blomfield,said the leadership had yet to decide how to whip MPs on the EEA amendment. Shadow Home Secretary, Dianne Abbott, also refused to rule outLabour supporting the amendment. “She [Abbott] is right behind us on this,” a Labour MP preparing to back the amendment told BI. “The people’s vote, EEA, all of it. She thinks Brexit is absolutely mad.” A source close to the party’s Brexit team told BI there was still a real chance of MPs being told to vote in favour of it. “The EEA model clearly has many advantages – and we’re aware of that,” they said.

…the response to everything him [John McDonnell] and Jeremy say is ‘OK great, but what about Brexit?

The key to determining Labour’s stance on the EEA question could come down to whoever puts the most compelling case to the leadership. The general feeling throughout Westminster is that Corbyn and his right-hand man, Shadow Chancellor John McDonnell, simply don’t care about Brexit as much as most Labour MPs and members would like them too.

“McDonnell, in particular, has been getting annoyed with Brexit,” a Labour MP who wished to remain anonymous told BI. “He’d much rather be talking about austerity. But the response to everything him and Jeremy say is ‘OK great, but what about Brexit?”

It’s for this reason that Labour’s EEA backers feel the issue is still up for grabs. A survey in January found that87% of Labour members want Corbyn to make staying in the single market party policy. Last week, Janet Daby was chosen to stand for Labour in the upcoming by-election in Lewisham East. Daby – who defeated candidates backed by left-wing group Momentum and the union Unite – is a vocal supporter of staying in both the single market and customs union. And more recently, Young Labour and Labour students joined forces to pen a letter to Corbyn, urging him to listen to the views of young Labour members and hold a vote on Brexit at the party’s upcoming conference in Liverpool.

We wouldn’t have a customs union policy if Keir wasn’t heavily involved.

“When it comes to the biggest issue of a generation, young people will not be taken for granted by the Labour Party,” Melantha Chittenden, chair of Labour students and supporter of the For Our Future’s Sake campaign, said exclusively to BI. “I’ve been taken aback by the numbers of young activists who have spoken to me about their wish for a voice on our policy,” Young Labour chair Miriam Mirwitch added.

Depending on who you believe, this alliance of single market supporters could face a considerable hurdle in the shape of Corbyn’s most trusted advisors, none of whom are known for their love of the EU. One former shadow minister suggested Corbyn’s unelected confidants were playing a bigger role in shaping the party’s Brexit policy than Shadow Brexit Secretary, Sir Keir Starmer. One ally of Starmer described this theory as “complete bollocks, total nonsense,” adding: “We wouldn’t have a customs union policy if Keir wasn’t heavily involved.” A serving shadow minister told BI that any claim Starmer doesn’t have a big say in the party’s policy-making was “extremely ungenerous” to him.

There is also a theory, shared by some Labour MPs, that Corbyn and McDonnell view parliamentary votes on Brexit legislation as a means of bringing down Prime Minister May and getting themselves into Downing Street. “The political opportunity is definitely attractive to them,” a Labour MP who supports the EEA option told BI.

Umunna told BI that Labour would be betraying its voters if it failed to support the EEA amendment. “I don’t think Labour Party members and supporters want to hear our front bench parroting the lines of CCHQ on why we cannot remain participating in the EEA,” he said.

Is the battle winnable?

Whether or not the campaign to stay in the single market succeeds will depend partly on the behaviour of pro-EU Brexit rebels in the Conservative party.

Several Conservative rebels are ready to form an alliance with Labour MPs to force the government into pursuing an EEA-style Brexit. “Labour moderates who want to vote for it should vote for it,” Morgan, a former Cabinet minister, told BI.

“They should take comfort from Labour peers who I’m sure also didn’t want to break the party whip… It would send a very clear message to the government that there is a consensus for a sensible Brexit.”

However, the big question hanging over Morgan, Anna Soubry, Ken Clark and other potential Tory rebels is how many times they are willing to stick their heads above the parapet and vote against the government. “They’re going to pick their battles,” one MP close to the ‘rebels’ told BI. “If they vote for a customs union, they’re less likely to vote for the EEA.”

With this in mind, most people involved in putting together Labour’s Brexit policy are far from convinced that the EEA amendment will pass. “I can’t see any scenario where this goes through,” one MP said. “This debate is important because it forces us to have a detailed conversation – but it isn’t going to pass.” Interestingly, the biggest obstacle may not be an insufficient number of Labour MPs rebelling against Corbyn to support the EEA, but too many rebelling against Corbyn if he decides to whip MPs in favour of it. “Are MPs from Leave seats really going to go back to their constituents and justify the free movement of people? No chance.” a Labour MP told BI. Caroline Flint, John Mann and other MPs expressed their opposition to the EEA at Labour’s most recent parliamentary gettogether.

Chuka UmunnaJack Taylor/Getty ImagesLabour MP Chuka Umunna.

If not Norway, then what?

Labour’s Brexit team – fronted by Starmer – is adamant that replicating the Norway-model is not the only way of maintaining full access to the single market. Sources close to Labour’s Brexit team have told BI they believe Brussels would be prepared to offer a unique single market package as long as Britain agrees to accept all EU standards and regulations, something which May’s Cabinet is currently not willing to do. This could include a single market arrangement without the free movement of people in its current form, they claimed.

“The EU is changing. It is not static. In France and Germany, they are talking about the free movement of people. Standards are much more important to the EU than immigration,” an ally of Starmer told BI. This was echoed by another Labour shadow minister, who said Labour’s policy was “rightly” to seek a new single market relationship because the Norway model is not adequate. “The EEA doesn’t include fisheries or agriculture. That isn’t going to solve the Irish border,” they said. “It hasn’t got my support – and for good reason.”

In his most recent statement on the subject, Corbyn seemed to nod towards a Norway-model with tweaks and add-ons, stating that EEA packages “currently in existence don’t meet the priorities that we have set out.” It’s clear that something close to the EEA will be the base of Labour’s Brexit policy going forward. Corbyn is expected to make an announcement on the party’s single market policy in the coming weeks.

Labour’s pro-EU MPs are impatient for Corbyn to make this clear.

Labour’s Stephen Kinnock – who was campaigning for the EEA long before the recent House of Lords vote – told BI that if the party’s Brexit team has a preferable alternative to the Norway option, it should come clean and set it out. Failure to do so risks leaving a “vacuum” for the likes of Jacob Rees-Mogg and Iain Duncan Smith to fill with policies of their own, he argued.

“If there is some new deal that our front bench has in mind, then great. But because that has not been set out, we are in a situation where we oppose the EEA, but the credibility of our opposition is fatally undermined by the lack of a counter-proposal,” the MP for Aberavon told BI.

“It’s fine to be against something but it’s very rare that you’ll win an argument simply being against something. We want an alternative, but we are not providing one. The EEA is the only model we know about which gets us anywhere near to achieving Labour’s six tests.”

We want an alternative, but we are not providing one.

The Tory MPs most likely to support the amendment are coy about the size of any potential rebellion. However, for those Conservative MPs who are vocal supporters of the EEA, like Antoinette Sandbach, backing the amendment is currently the most likely route to a damage-limiting Brexit.

“The key thing about the EEA option is it is separate from the EU’s ever closer union,” Sandbach told BI.

“It is a way of preserving the economic relationship we have with the EU while relieving ourselves of the political project of the EU. EEA countries are also able to pursue their own independent trade policy. It allows our financial serviced access to the European markets. These things are absolutely critical.”

For those MPs from across the House of Commons fighting for Britain to remain in the single market, the battle is still far from over.

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