Tony Blair is among those hoping a deal on immigration can keep Britain in the single market, but EU leaders are unconvinced

Tony Blair is only the latest politician to attempt to square the Brexit circle: rewriting the European Union’s basic rules to allow Britain to stay in the single market and regain control of immigration.

The debate that the former UK prime minister reopened is most acute for the Labour party. When Keir Starmer set out the party’s new Brexit policy, he called for Britain to remain in the single market and sign up to free movement of people for a transition of up to four years. Looking beyond that, he called for “a new single market relationship” with the EU, while controlling immigration.

The Labour leader, Jeremy Corbyn, has also stepped up his calls for Labour to retain “full access” to the single market, although the term is seen as too vague to be meaningful.

Andrew Adonis, a former Labour cabinet minister, has meanwhile predicted in recent weeks that a newly re-elected Angela Merkel could with the French president, Emmanuel Macron, make an offer on free movement to keep Britain in the EU. The former deputy prime minister Nick Clegg has argued that a deal on free movement is possible with “a little more ingenuity”.

Britain has been here before. David Cameron spent more than three years trying to secure his version of a “new single market relationship” that would allow Britain to limit EU immigration. His plan for an emergency brake on numbers ran into a brick wall. “No way. Never,” Merkel is said to have told the then British prime minister at a bilateral meeting in October 2014. “I would never agree to it, you can’t have numerical limits.”

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Merkel’s opposition to ending free movement for Britain never wavered. After the referendum result, she was one of the first European leaders to insist the EU’s four freedoms were indivisible, meaning Britain had to accept them all (goods, services, capital and people) or quit the single market.

In the febrile days after the Brexit vote, some senior EU officials were surprised Cameron made no attempt to broker a deal on free movement when he attended his final EU summit. “The assumption was that the UK government would try to manage [the referendum result] like any normal country … in such a way that they would get an improvement in the settlement,” said one.

However, as one former Downing Street adviser has written, Cameron already knew no other offer would be forthcoming “whatever we had offered, threatened or pleaded”.

The EU’s point-blank refusal to allow “cherrypicking” has since held strong. So it was notable when a handful of well-connected insiders departed from the script, calling in a controversial August 2016 paper for a “continental partnership” that would allow the UK to retain the rights of the single market, without free movement of people, so long as it paid into the EU budget and accepted EU rules.

The paper attracted attention because of its authors: a high-flying French economist who went on to advise Macron, the chairman of the Bundestag committee on foreign affairs and a former economic adviser to Romano Prodi, who led the European commission between 1999 and 2004. But it bombed in Paris and Berlin, and was described as “politically naive” by Brussels insiders.

“People were shocked because it was really the first paper, it dared to go places that others hadn’t gone before,” said Maria Demertzis, the deputy director at the Bruegel thinktank, which published the paper. She maintains a deal could be done on free movement, because “it is the only thing” the EU can compromise on, without damaging the integrity of the single market. “That issue is no longer a taboo issue … it is still talked about in closed circles.”

Facebook Twitter Pinterest Immigration and passport control at Heathrow airport. Some believe free movement is the only thing the EU can compromise on. Photograph: Alamy

Others are unconvinced. Fabian Zuleeg, the chief economist and head of the European Policy Centre thinktank, argues that free movement is integral to the single market – economically, legally and politically. “European leaders will do what they can to keep as close ties as possible with the UK, but that does not mean sacrificing the principle on which the single market is based ... it would threaten the whole fabric of the European Union if a member state leaving could get a better deal than those within it.”

The right to study, work and retire abroad is popular and cherished in many EU countries. This is especially true in central and eastern Europe, where governments see individuals’ right to move as a fair exchange for competition from western goods and services. EU leaders worry that unpicking freedom of movement could lead to endless special pleading that would unravel the single market.

Moreover, most EU officials think EU free movement rules already include safeguards, which they say successive British governments made little use of – a point that is acknowledged in the paper published by Blair’s Institute for Global Change.

Other EU countries have also been tougher on policing free movement. Several demand to see employment contracts, whereas the UK’s booming labour market made it easier for people to pick up jobs on arrival. EU rules also allow people to be expelled on the grounds of “public policy, public security and public health” and require people moving to another country to prove they have “sufficient resources” to stay longer than three months.

Labour strategists have something else to work with. The EU showed how far it could go when the deal Cameron secured before the referendum stated that free movement may be limited in the “public interest”, which it defined broadly as “encouraging recruitment, reducing unemployment, protecting vulnerable workers and averting the risk of seriously undermining the sustainability of social security systems”. Some diplomats speculate that if Cameron had been in less of a hurry he could have secured a Europe-wide tightening of free movement rules, rather than just a special deal for the UK.

“If you look at the increased misgivings already stirring at the time on free movement, I am quite convinced it would have been possible to get a horizontal discussion on free movement,” one senior diplomat told the Guardian. “There were a lot of members states interested in making similar things happen.”

Similar but not the same. Germany, Austria and the Netherlands joined the UK in calling for tightening up free movement rules in 2013, such as a ban on re-entry of people who had been expelled. Macron wants to adjust EU rules on posted workers – employees sent by an employer to temporarily work in another member state – a reform that is already under way. Britain, however, is alone in seeking limits on numbers. Even privately sympathetic EU leaders see no electoral gain in restricting free movement for their citizens.