You might think Labour is having a ‘cake-and-eat-it’ moment, but its plan is not as far-fetched as some say

It was a Freudian slip that hinted at the real question behind Jeremy Corbyn’s big Brexit speech in Coventry. As he reached out to moderate Conservative MPs to join him in supporting a new customs union with the EU, the Labour leader appeared to accidentally offer them “new cake” instead.

Blink and you missed it, but for those who have long worried that Labour is emulating Boris Johnson’s infamous “cake-and-eat-it” approach to Brexit, it was an unfortunate reminder that simply declaring what Britain wants from its negotiations with the EU is not the same as achieving it. Labour’s tactic for peeling off anxious Tories is widely seen as smart domestic politics, but whether it proves a smart policy too depends on convincing other countries to go along with it.

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

Fortunately for those who hope this tactic could yet unlock Britain’s paralysis over Brexit, there was the beginning of an answer to the question as well. The brief verbal stumble was followed by a much more nuanced explanation than either party has offered before. The key caveat, stressed Corbyn, was that any new customs deal with the EU had to involve an agreement for both sides to also work together on future trade negotiations with the rest of the world.

“The option of a new UK customs union with the EU would need to ensure the UK has a say in future trade deals ... being able to negotiate agreement of new trade deals in our national interest,” he said. “Labour would not countenance a deal that left Britain as a passive recipient of rules decided elsewhere by others. That would mean ending up as mere rule takers.”

This is the difference between what Labour and the Tory moderates are offering, and what Tory critics such as Liam Fox fear would result if Britain signed up to a narrow custom union – like that which Turkey currently has with the EU.

In Turkey’s case, a limited customs union arrangement has allowed both access to Europe’s integrated manufacturing supply chains and preserved independence from EU freedom of movement rules. Similar arrangements for Britain could therefore protect the car industry and the openness of the Irish border while respecting wishes among Brexit voters to curb migration.

The catch, however, is that a customs union automatically implies a common external trade tariff with third-party countries. In order to keep its car parts flowing smoothly back and forth over the EU border, Turkey avoids triggering “rules of origin” problems by accepting the same external tariffs and mainly hopes to tag along for the ride when the EU negotiates new trade deals.

Corbyn wins plaudits from business for saying UK should stay in EU customs union - Politics live Read more

Such a diminution of international influence would be a tough sell for any British government. It is not just those who fetishise sovereignty and a swashbuckling new future who would blanch at outsourcing trade policy to Brussels. It would also make it far harder for leftwing opponents to block controversial deals like the Transatlantic Trade and Investment Partnership (TTIP) with the US.

But insisting that Brussels continues to consult the UK when it negotiates with countries such as the US and China is not quite as far-fetched as some critics have been suggesting in the wake of Corbyn’s speech.

A deal struck between the EU and US that failed to involve the UK and that subsequently also led to the unravelling of the post-Brexit cross-Channel trade arrangements would be almost as undesirable for future Brussels trade negotiators as it is now. A genuine alliance of UK and EU negotiators operating as a unified bloc may also stand a much better chance of getting what it wants in Washington or Beijing than either could hope for operating alone.

It’s a big ask to make of Michel Barnier as well as Brexit voters, but it may be the most honest attempt to square the circle yet.