Corbyn says he will fight for economic relationship with Europe, as pair clash over Brexit at Labour hustings in Solihull

Owen Smith has accused Jeremy Corbyn of having never believed in the European project and is seeking to turn the issue of the EU referendum into the main dividing line in the battle for the Labour leadership.

The Labour leader hit back by telling his challenger that he had to respect the result of June’s referendum and accept that Brexit was on the table.



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In his strongest attack yet, Smith – whose team are planning to place debate over the EU at the heart of their campaign – said: “I think Jeremy can’t bring himself to say he would argue for a second referendum or put into a Labour manifesto that we would stay within the European Union because he fundamentally never believed in the European Union.

“That is why he steadfastly refuses [to promise a second referendum], even though he acknowledges a likely Tory Brexit will diminish workers’ rights; damage social protections; damage our ability to deal with tax avoidance. Even though he thinks that is likely to happen, he thinks it more important that we stay outside the EU – I think that is a deep, deep mistake.”



Smith, who is trailing well behind in the polls, hopes that a pledge for Labour to take Britain back into the EU will appeal to pro-European Labour members and boost his chances.



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“We should be fighting harder, why can’t you say you would fight to stay in?” he shouted.



Corbyn responded: “The referendum took place, the result is there, we know the Tory agenda.” He said he would fight for an economic relationship with Europe, protections for workers, the environment and trading relationships with other countries that did not echo the US-EU trade deal, known as TTIP, that he strongly opposes.



Corbyn admitted to some Euroscepticism, saying the EU had weaknesses including pushing countries to privatise their railways. “But we have to recognise there were some problems before the referendum with the EU ... There is an agenda in Europe which is not something Labour would support which is the free market agenda.”



Supporters took to social media to argue that Corbyn was more likely to attract voters in working class heartlands with his position on the EU.



The two contenders – who appeared to agree on most domestic policies – also clashed over a question on Nato during an official hustings in Solihull, in the West Midlands.

Asked how he would respond to military aggression by Vladimir Putin toward a Nato member, Corbyn suggested that he would not intervene militarily in line with the agreement between countries in the grouping.

The Labour leader said. “We cannot allow a military buildup which could be calamitous. I would want to avoid us getting involved in military. I don’t wish to go to war – what I want to do is achieve a world that we don’t need to go to war.”

The comments triggered an angry response from some Labour MPs. Ilford North’s MP, Wes Streeting, said the public would conclude he was “unfit to hold the office of prime minister” if he refused to uphold the Nato of principle of mutual defence. “It is a gross betrayal of Labour’s internationalist values,” he told the PoliticsHome website.

“The only other significant politician to be so reckless and cavalier about the future of Nato is Donald Trump. They are different sides of the same coin: thoughtless and irresponsible.”

Smith said: “We would have to come to the aid of a fellow member of Nato, that is the nature of the Nato accord.” However, he said that it would be calamitous to get to that stage and argued diplomacy would have to be used to try to avoid it. Smith again argued that membership of the EU would help in this area.

But the Welsh MP was heckled and jeered when he claimed that 170 Labour MPs who voted no confidence in Corbyn were “socialist” – causing the host, ITV’s Carl Dinnen, to intervene. One audience member shouted “traitor”, while others also expressed anger at Smith and other politicians who had caused the leadership contest.

Smith defended his claim that Britain should be willing to negotiate with Isis. “I said yesterday there was no prospect of negotiating with IS [Isis] – we should never negotiate with terrorists when they are maiming and bombing. And the chances are we will never end up negotiating with IS. They are nihilistic and they are seeking to destroy people,” he said.

But he argued that if they ever did renounce violence, negotiations could take place as they had in Northern Ireland with people who had “committed murder and terrorism”.

The pair also put forward policy ideas, with Smith flirting with the idea of reducing VAT by 5p. Corbyn said he would not increase the basic rate of income tax or VAT, and both said they would increase the top rate to 50p and raise corporation tax.

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On immigration they both focused only on the positives for the economy and did not address concerns in working-class communities.

Both said they would have to work with Donald Trump if he was elected US president. “What a thought, the prospect of Donald Trump being the next president of the US, it fills me with some trepidation,” said Smith.

Corbyn added: “The simplistic statements that Trump makes about the killing of black people in the US, the treatment of Mexicans, poverty ... often beyond belief. I hope he is not elected in the event that he is – one would have to negotiate with the USA ... ”

He said he would invite Trump for a cup of tea at a mosque in his constituency.