Jeremy Corbyn’s speech on Britain after Brexit is a milestone in the UK’s mistaken exit from the European Union. It was a daring address, situating Brexit among other foreign policy crises such as climate change and the refugee emergency. The oration was important because it revealed Mr Corbyn’s sceptical thinking on Europe: he accepts Britain is leaving the EU; he thinks the single market might stop Labour from implementing radical policies; and he is worried that free market orthodoxy is embedded in the EU. He may – or may not – have a point about all these things. But the salient detail was that Mr Corbyn would negotiate a new customs union with the EU. In saying so, Labour appears smarter and less fantastical than the Conservatives. Mr Corbyn is right for two reasons. First, a customs union would make it easier to avoid a hard border between Great Britain and the continent, especially in Ireland. Second, UK industry relies on cross-border supply chains, and without a tariff-free arrangement companies would face costly delays. By considering the issues of business and the peace process in Northern Ireland, Mr Corbyn’s Labour is revealed as a party of sensible thought in the face of adversity.

Play Video 3:35 Jeremy Corbyn: UK should remain in a customs union with EU – video

The contrast with Theresa May could not be clearer. Mr Corbyn leads Labour while the prime minister is being led by Brexiter MPs who operate as a party within her party. Tory Brexiters believe that Britain can diverge in key areas from EU regulations and not face barriers to trade in Europe. This is an illusion: if Britain wants a close trading relationship with the EU, it has to cleave to EU standards. Mr Corbyn understands this. He knows that EU rules have become global standards and UK industries will wish to follow them. Thus Labour, sensibly, accepts EU jurisdiction over the production and trade of goods – committing itself to support EU agencies that regulate industrial sectors. This greases the wheels in any talks about a new customs union.

The Tories have also bought the fiction that global deals with China or the US could replace trade flows with Europe. This fallacy is built on the idea that the UK could undercut and deregulate its way to growth. Labour recognises this is not possible nor desirable. Instead, it is refreshingly realistic and hard-nosed. Mr Corbyn wants an EU-UK customs union but only if the British can have a say – not a veto – in negotiating the bloc’s future trade deals. This would allow the UK to strike trade deals together with the EU. It would also give the UK the same market access as EU member states to third countries that have free trade agreements with the EU. This is a win-win policy for both sides: the EU can offer potential third partners the UK market, as well as its own, in new trade deals.

Mr Corbyn should be congratulated for his pragmatism on the issue of the customs union – arguing for both workers and business amid the crass populist impulses of Brexit. His outbreak of reason should extend to the Tory party. As a first step, Downing Street could stop appeasing the group of MPs who are theologically opposed to the EU. These Tories will not take yes for answer – despite Mrs May being desperate to capitulate. The result is that her position is getting closer and closer to a hard Brexit that abandons the single market, the customs union and the European court of justice. This is popular only on the fringe of politics, so why make it government policy? Mr Corbyn’s offer on the customs union would command a majority in parliament, which ought to bother the Tory leadership. Mrs May should make up her own mind, rather than let irreconcilable opponents of the EU make it up for her.