The Liberal Democrats are set to escalate their demands for a closer relationship with the EU, specifically urging Labour to reconsider its Brexit stance and commit to rejoining the lucrative single market. This push comes as the UK is on the cusp of marking a decade since the 2016 referendum that led to Britain's departure from the European Union.
Party leader Ed Davey is poised to challenge key Labour figures, including Andy Burnham and Wes Streeting, to abandon their 'red lines' on the customs union and single market. Mr Davey will argue that these limitations are crippling Britain's economic progress and playing into the hands of other parties. He will advocate for immediate talks on a more ambitious agreement with the EU, should Labour form the next government.
A core component of the Liberal Democrats' proposal involves the UK rejoining the single market as part of the European Free Trade Association (EFTA), which includes Norway and Iceland. This would be coupled with the establishment of a new UK-EU customs union. The party claims that such a move would dismantle trade barriers with Europe and help to reverse the estimated £90 billion in annual economic damage attributed to Brexit.
Rejoining the single market would necessitate the UK accepting the principle of free movement of people, a stance at odds with the Conservative Party and Reform UK's stricter immigration controls. The party suggests that a return to free movement could benefit sectors such as hospitality, agriculture, and social care, which often experience labour shortages. Furthermore, they believe it could facilitate a 'very tight' returns agreement under the Dublin framework, potentially addressing issues like the 'small boats crisis'.
While Labour has reaffirmed its commitment not to rejoin the EU's single market or customs union, the Liberal Democrats are pressing for a shift in this policy. Their argument is that Labour's current approach amounts to politely saying 'no' to closer ties, much like the Conservatives. EU officials have previously indicated an openness to the UK joining the European Economic Area (EEA), which encompasses the single market, but have explicitly ruled out any arrangement that would allow common rules on goods without the acceptance of free movement of people.