February 25, 2018 / 10:12 AM / 9 months ago

Labour to back customs union, says May faces Brexit 'crunch time'

LONDON (Reuters) - Britain’s opposition Labour party will back a new customs union with the EU, its Brexit policy chief said - a move that would make commerce with the bloc easier but limit the country’s ability to strike other trade deals.

Britain's Shadow Brexit Secretary, Keir Starmer, is seen speaking on the BBC's Andrew Marr Show in this photograph received via the BBC in London, Britain February 25, 2018. Jeff Overs/BBC/Handout via REUTERS

Keir Starmer said on Sunday his party had agreed that if it wins power it should negotiate a new union with the bloc, and that Conservative Prime Minister Theresa May faced a potential rebellion over her position on the issue.

“Crunch time is now coming for the prime minister because the majority in parliament does not back her approach to a customs union and ...will be heard sooner rather than later,” he said.

Starmer’s comments, in a BBC television interview, came before a speech by Labour leader Jeremy Corbyn on Monday when he is expected to clarify the party’s Brexit stance.

The Conservatives are deeply divided over what sort of relationship should be built between the EU and the world’s sixth-largest economy after Britain leaves the bloc in March 2019.

The adoption by Labour of a more decisive position of support for a customs union with the EU would intensify pressure on May’s party, which holds a minority of seats in parliament.

Such a shift could pave the way for Labour to vote alongside Conservative lawmakers who are backing amendments to a trade bill that would keep Britain in the customs union.

Starmer hinted on Sunday that his party might support those amendments, which have the potential to hand the government a major defeat that would amount to a direct challenge to the prime minister.

“We haven’t made a final decision on that. But they are so close to our amendments,” he said.

Trade minister Liam Fox urged Conservative colleagues to keep an “open mind” and said their concerns might be addressed in a speech by the prime minister on Friday.

May hosted an eight-hour meeting of her Brexit war committee last week in an attempt to forge a common position. One source said she had accepted the argument of those ministers who wanted to diverge more quickly from EU rules and regulations. (nL8N1QC88P)

Starmer said Labour backed staying in a customs union to preserve trade in its biggest markets, and because it was the best way of avoiding the return of a hard border on the island of Ireland.

“Obviously it’s the only way realistically to get tariff-free access... (which) is really important for our manufacturing base,” he said.

But Labour also remains divided over Brexit.

In a letter to the Observer newspaper, more than 80 senior figures in the party called on Corbyn to commit to remaining in the EU’s single market.

The group of members of parliament, members of the European parliament, council leaders and trade unionists said the party’s investment plans could not be funded if Britain leaves it.

Reporting By Andrew MacAskill; editing by John Stonestreet

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