Jeremy Corbyn’s shift in Labour’s position over a customs union could become a very big moment in the twists and turns of Brexit. Chris Lloyd looks at the whys, wherefores and what may happen next.

What is a customs union?

A CUSTOMS union is an agreement between a group of states which eliminates customs duties between them. It means goods can flow without payment between them. The countries involved in the union also agreed to levy a common tariff on goods arriving from outside their group so that those goods can then flow unhindered across their borders.

However, this means that the customs union has to negotiate the trade deals with outside countries.

A single market is a much deeper form of a customs union where the countries agree common safety standards or production values or packaging details.

Why does Labour want to stay in a customs union?

ALMOST every study suggests that, economically, Britain will be harmed by Brexit. The Government’s own impact assessment suggests that the North-East ecomony will shrink by 16 per cent if we leave completely. Therefore, a customs union is a way of mitigating this hit.

Perhaps the largest headache thrown up by Brexit is how a border between Northern and southern Ireland is policed, with a fear that any barriers, be they physical or virtual, between communities will turn the clock back. A customs union removes some of the need for barriers.

What do Labour’s opponents say?

THE main benefit of Britain being independent is its ability to do nimble trade deals with whoever it likes – including the world’s fastest growing economies which are outside the EU. But this customs union would shackle Britain to the EU and prevent it doing those deals, and it seems unlikely that the EU will allow Britain an individual say on those deals, despite Mr Corbyn's hopes.

Opponents will also ask whether a customs union is within the spirit of the referendum result in which the people voted to leave – or is this a soft Brexit which is really Brino – Brexit In Name Only.

What are the politics of Labour’s decision?

LABOUR had been accused of having no obvious Brexit policy other than “constructive ambiguity”. Now it has a clear policy.

Of course, Labour in opposition doesn’t have to have a policy. It may have been better for it to quietly sit back and watch the Conservative extremes – Jacob Rees Mogg on one side and Anna Soubry on the other – pull the Tories a part.

But there are Conservative Remain MPs who are keen on a customs union. With Theresa May having a slim majority of 13, it will only take a few of them to vote with Labour to defeat her. Whether they would then bring Mrs May down in a vote of confidence is debatable, but they could force her to move away from a hard Brexit line.

The new Labour policy makes Mrs May’s desire for “frictionless” trade look hollow because she can’t say how she would achieve this. With May’s local elections looming, the Conservatives are braced for heavy losses in anti-Brexit London, so Mrs May will attempt to explain her position in a speech on Friday.

This is a huge gamble for Labour. How will the northern heartlands, which like Hartlepool voted 70/30 for a decisive exit, feel about seeing the party take a soft path?

Has Labour gone far enough?

ALTHOUGH the Tories are desperately divided over Brexit, Labour, too, has its differences and last week Sedgefield MP Phil Wilson showed the highly-regarded Brighton MP Peter Kyle around County Durham. Brighton voted 69/31 to stay in the EU whereas Durham voted 42/58 to get out.

Mr Kyle toured the south of England in a self-financed Remain battlebus, and is now a leading advocate of a second referendum, but how would that go down in Brexit Durham?

“Our country has advanced in the most profound way, but the single insight I got from my tour was that there are some communities which simply haven’t benefited from modern Britain,” he said on a visit to Newton Aycliffe, where 12,000 people are employed in what may be the largest business park in the North-East. “They felt they had nothing to lose, that they are neglected, and they quite liked the idea of having rich, out of touch people having just a taste of what they have had. I now understand that and I have a degree of sympathy with that.”

However, his fear is that Brexit will not affect the establishment but it will damage local economies like Aycliffe’s, where 50 per cent of the jobs have a European element.

Backed by Mr Wilson, he believes a second referendum should be held when a deal is struck, if only to strengthen the resolve of the negotiators to do better.

“We are on a remorseless journey to Brexit,” he said, “but the key thing is that we haven’t reached the destination yet. It is a one-way street, but it is for the British people to decide where our destination is. If they don’t like what they see, it can be changed if that is what they want.

“Ukip has had seven leaders since the referendum. If it can change its mind then surely the country can, too. That’s democracy. It isn’t a one off event. It is a process.”

According to Shadow Chancellor John McDonnell, Labour’s policy has “evolved” so that as of yesterday it backs a customs union. To reach a second referendum would probably need less evolution and more revolution, but in these times of immense political upheaval, who knows where the Brexit journey will end?