Labour could support free movement if single market was reformed, says John McDonnell

Shadow chancellor floats possibility of 'changed single market' after Brexit

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Labour would be in favour of keeping a form of free movement after Brexit if a "changed single market" could be formed, John McDonnell has said.

The shadow chancellor hinted at a softening in his party’s position on the single market after the EU withdrawal, suggesting European leaders might agree to reforms which retained some of the benefits of the existing deal.

Mr McDonnell said it would be “difficult to see” how Britain could stay in the existing agreement due to “exploitative” freedom of movement rules that allow employers to undercut wages.

It comes as Jeremy Corbyn said he was prepared to listen to Labour members who want to remain within the EU trade agreement as he acknowledged there would be "a lot of movement" by EU workers after Brexit.

Speaking on the first day of Labour’s annual conference, Mr McDonnell told ITV’s Peston on Sunday: "In that way, we think we can achieve all the benefits of the single market, overcome some of the disbenefits that were perceived in the referendum and in that way achieve a close and collaborative relationship with Europe in all our interests.

Asked if he would remain in the single market if suitable changes were made to freedom of movement, he said: "It wouldn't be the single market as we now know it, based on the four freedoms (of movement of goods, services, capital and labour). Those four freedoms would be adjusted.

“We believe we can reform freedom of movement of people on the basis of protecting wages. That would be a changed single market."

He called for "a relationship which is based on tariff-free access, the structures renegotiated but the objectives are the same" after Britain leaves the bloc.

Senior Labour MPs and party members have urged Mr Corbyn to distance himself from the Tories by altering the party stance in favour of full membership of the single market after the transition period is over.

In an open letter signed published in The Observer, MPs including former shadow cabinet members Chuka Umunna and Heidi Alexander, as well as one of Mr Corbyn's allies, Clive Lewis, said Labour must do more to protect jobs and workers' rights.

The letter, which was also signed by the TSSA union's general secretary, Manuel Cortes, former Northern Ireland secretary Lord Hain and Liverpool mayor Joe Anderson, called for an alternative to the Tories' “destructive Brexit”.