How significant was David Lammy’s refusal to rule out a customs union with the EU?

The deputy prime minister and Wes Streeting, the health secretary, have hinted that Labour is tiptoeing towards reversing Brexit, writes John Rentoul

There may be an element of positioning for personal advantage, if Lammy wants to maintain his support among Labour MPs and party members – both groups being heavily Remain-dominated (PA)

David Lammy, the deputy prime minister, refused seven times to rule out rejoining the EU in an interview on Thursday. He said that Brexit had “badly damaged our economy”, but when he was asked if Britain should form a customs union with the EU, he said that this was not “currently” on Labour’s agenda, even though it was “self-evident” that other nations had “seen growth” by doing it.

Wes Streeting, the health secretary, had said on Wednesday that Labour should undo “the economic damage done by Brexit”.

The day before that, on Tuesday, Keir Starmer surprised the cabinet by announcing that Nick Thomas-Symonds, the minister for EU relations, would be attending cabinet meetings – a status upgrade for the minister responsible for negotiating the “reset” in UK-EU relations.

All of which followed reports that Minouche Shafik, who was appointed as the prime minister’s economic adviser in September, has been pushing for closer ties with the EU as the quickest route to higher economic growth.

What is going on?

Possibly less than meets the eye. Shafik’s views are conventional, and simply arguing that Britain should be “closer” to the EU is government policy. The “reset” negotiations are reaching a critical point, and so it makes sense for Thomas-Symonds to attend cabinet – especially as an EU-UK summit will now be a yearly event.

It is also no secret that nearly all members of the government, from Starmer down, think that Brexit was a mistake and that in an ideal world Britain would be a member of the EU. So if cabinet ministers are asked about Brexit, they are likely to say that leaving the EU was economically damaging.

Streeting was just about in his lane, therefore, even if, in the current feverish atmosphere in the Labour Party, saying anything vaguely pro-EU is seen as part of a leadership bid.

However, rejoining the EU single market or joining a customs union with the EU are Labour’s “red lines”, and you would expect Lammy to have ruled out a customs union – at least for this parliament.

So are the tectonic plates shifting?

It is only 17 months since the last election, but cabinet ministers are bound to be thinking about what Labour’s position will be at the next election. This has been reflected by influential commentators this week. Daniel Finkelstein in The Times argued that Labour politicians will be driven inexorably by the logic of their beliefs towards promising to rejoin the EU single market in their next manifesto.

Janan Ganesh of the Financial Times, meanwhile, argued that this is what they should do, because it would be a good way to rally the pro-EU electoral coalition against Nigel Farage.

Perhaps Lammy agrees with this and was deliberately pushing at what he thinks is an open door. There may be an element of positioning for personal advantage in this, too, if he wants to maintain his support among Labour MPs and party members – both groups being heavily Remain-dominated.

However, it is worth noting that Starmer himself, in a long interview with the pro-EU Economist on Wednesday, shut down talk of a customs union by saying: “We do have to accept that we did have a vote on whether to be in or out of the EU in 2016, and it was a fair democratic vote.”

But is an EU customs union a good idea?

It is a more complicated idea than it seems. It looks like a way of rewinding the vote of Labour MPs against Theresa May’s soft Brexit deal. Her deal would have, in effect, kept the UK in a customs union with the EU. This would have given Britain the advantage of frictionless trade with the EU without being a full member of the single market, and without having to be part of the EU’s free movement of people.

Labour, with Starmer as its Brexit supremo, voted against it in the hope of stopping Brexit altogether, and ended up with Boris Johnson’s hard Brexit instead. Many Labour MPs regret that decision.

However, it is not clear what kind of customs union could be negotiated now. Because it would mean the UK and the EU having a common external tariff regime, it would mean tearing up Britain’s trade deals with the US and India, of which Starmer is proud.

On the other hand, it would probably be difficult for Labour to go into the next election with the same “red lines” that it laid down last time.