Show caption Remain voters gather in Parliament Square in July 2016, shortly after the EU referendum. Photograph: Neil Hall/Reuters Brexit As Labour becomes party of soft Brexit, hard battles lie ahead After a year of ambiguity on Europe, Jeremy Corbyn now has a clear platform from which to take on Theresa May Toby Helm Political editor Sat 26 Aug 2017 16.00 EDT Share on Facebook

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After a summer during which arguments over Brexit have raged inside both the Tory and Labour parties, and Brussels and London have conspicuously failed to find any substantial common ground, formal talks on Britain’s departure from the EU in March 2019 resume in the Belgian capital on Monday.

The Brexit secretary, David Davis, will no doubt bounce into the meeting with his characteristic grin and the body language of a pent-up boxer itching to land the first blow. But the context for the latest round of discussions with his EU counterpart, Michel Barnier, could hardly be less propitious.

In an attempt to convey an impression of clarity where little exists, Davis’s Whitehall department has spent the past fortnight issuing a series of position papers spelling out Britain’s latest negotiating stances on key issues – including this country’s future relationship with the customs union and the European court of justice (ECJ), and its plans for the border between the Republic of Ireland and Northern Ireland, after the UK strikes out on its own.

With some justification Labour’s Brexit spokesman, Keir Starmer describes the papers as “bland and non-committal”. Many politicians, independent experts and lawyers in London, Brussels and other EU capitals have dismissed them as a “wish list” that says more about irreconcilable divisions in the Tory party over Brexit than it does about realistic options for progress.

The message that rings out from the papers is that the government wants to leave the customs union and single market from March 2019, end pretty much all jurisdiction of the ECJ from that time on, no longer have to accept free movement of people and workers, and pay no further annual financial contribution to Brussels. That is the part the hardline Tory Brexiters want to hear. The part about a clean break.

But to appease “soft-Brexit” Tories and much of the business community, who traditionally support the Conservatives, the documents also spell out how Britain wants a transition period of around two years after Brexit, with maximum access to the single market – and arrangements that in effect mirror those of the customs union. In essence Davis will go into the critical next phase of talks in Brussels seeking to retain all the benefits of European economic union while insisting the UK cannot accept any of the rules that underpin it, or pay a single euro for doing so.

Pro-Europeans in the Labour party have argued for some time that the evident chaos in Whitehall and lack of credibility in the government’s position on Brexit – its “cake and eat it” approach – offers huge political opportunity for the official opposition. But until this weekend Labour’s own Brexit policy has been not dissimilar from the Tories’ – the tortured product of a party almost equally divided over Brexit, and one that as a result has sought safety in deliberately obscure and nuanced messages.

In the run-up to the June general election, in which many Labour MPs feared a wipeout, Starmer had an interest in perpetuating this kind of “constructive ambiguity” that he now says must end.

At the referendum, Labour supporters broadly split between those in urban areas of the Midlands and north of England who backed Brexit at least partly because of concerns about freedom of movement and immigration, and those in the more metropolitan south who backed Remain, seeing the benefits of economic and cultural integration that the EU promotes. It was important, Starmer’s defenders said, to offend neither side of the Labour divide with the party so perilously positioned ahead of polling day. The Labour leader, Jeremy Corbyn, and shadow chancellor, John McDonnell, were anyway far from starry-eyed pro-Europeans (they still feel the old left’s antipathy towards the EU in their bones), so ambiguity suited them too.

Today, however, marks a highly significant turning point for Labour (and possibly for the country) in its approach to the EU – a move away from the party’s previous defensive ambiguity to one of far more positive engagement. In Starmer’s Observer article, signed off by the leadership and all key players in the shadow cabinet (albeit after days of intense argument), Labour has repositioned itself clearly and decisively as the party of “soft Brexit”. For the first time since the people voted to leave the EU, there is a visible expanse of clear blue water between the “hard Brexit” Conservative approach and the Labour one.

Keir Starmer. Photograph: David Sillitoe/The Guardian

Whereas the Tories will pull the UK out of the single market and customs union on Brexit day in 2019, Starmer announces that Labour would keep the UK inside both and “abide by the common rules” of both, throughout the transition period. This period, Labour believes, could be as long as four years. During this time the UK would continue to abide by EU rules on free movement, accept the jurisdiction of the ECJ in trade issues, and pay money to Brussels. It would also use the time in transition to negotiate reforms to freedom of movement so the UK would regain more control of immigration policy. Perhaps even more significantly, Labour is not ruling out remaining in the customs union and the single market permanently if it can achieve the reforms it seeks. Put simply, a Labour government would try to keep the country inside the EU economic union during the transition period – while leaving the political union – and possibly beyond.

The reasons for Labour’s dramatic Brexit gear shift are many. Certainly a summer of stark warnings from business about the economic damage of a hard Brexit, and the impression that the Tory government is pursuing one for ideological reasons above all else, have shifted the national and party mood. This weekend, unaware that Starmer was preparing a big announcement, many Labour MPs – including Heidi Alexander and Alison McGovern– are launching campaigns calling for Labour to back single market membership with no ifs and buts.

But the change is deeply political too. Labour is now in a completely different position from the one it expected to be in when it approached this year’s snap general election. Rather than strengthening her grip on power on 8 June, and her ability to drive through a hard Brexit, the election left Theresa May without a Commons majority and massively weakened. Corbyn and Labour were strengthened in equal measure.

Labour now senses the possibility of power itself, and the way it is most likely to seize it will be by exploiting Tory turmoil and division on the issue of Europe. To do so, though, it has to have its own distinct approach. Much of Corbyn’s support on 8 June came from anti-Brexit young voters, whose enthusiasm will now be recharged. The scent of power seems to be injecting a new dose of pragmatism into the leadership. Corbyn, McDonnell and Starmer will all know that if they are to form a Labour government in the next few years, the worst possible economic conditions in which to take charge will be amid post-Brexit economic chaos outside the single market and customs union. What chance then would the party have of affording a Keynesian injection of public money into the economy and public services, if tax receipts were plummeting and the economy in headlong retreat?