DANIEL HANNAN: Step by step, Labour will bring us back into line with EU rules. How long before they come clean about wanting us to rejoin?

DANIEL HANNAN is International Secretary of the Conservative Party and serves on the Board of Trade. 

Labour is not bothering to pretend any more. It will rejoin the EU in all but name – a worse outcome, in some ways, than formally going back in.

It talks openly of signing up to EU regulations, although Britain would have had no input into those rules. We are heading for the worst of all worlds.

Labour's Euro-zealotry is a product of its opinion-poll lead. Back when it drew up its manifesto, it still felt a batsqueak of doubt about its chances at next month's election.

Determined to offer no hostages to fortune, the party pledged to respect the 2016 referendum result and to remain outside the EU's single market and customs union.

But its heart was never in those pledges. Remember: in the run-up to the 2019 general election, Sir Keir Starmer had campaigned for a second referendum. It was one of the few topics on which he spoke with passion and sincerity, arguing that 'deeply embedded in our values are internationalism, collaboration and cooperation with our European partners'.

Rachel Reeves and Jonathan Reynolds (right) meeting business leaders this week

David Lammy, the shadow foreign secretary, took the same line, dismissing those who had voted Leave as fascists. 'You can't write off 48 per cent of voters without a serious fight, and we cannot usher in rule by plebiscite which unleashes the 'wisdom' of resentment and prejudice reminiscent of 1930s Europe.'

His reference to '1930s Europe' was not a throwaway line.

In the run-up to the last General Election, Andrew Marr asked him whether likening Tory Eurosceptic MPs to Nazis wasn't laying it on a bit strong. Lammy replied: 'I would say that that wasn't strong enough… I don't care how elected they were: so was the far-Right in Germany.'

Are we to suppose that these two men, and the mass of Labour MPs who cheered them on, no longer pine to see British MEPs gourmandising in Brussels?

Of course they do. It's just that Boris Johnson's resounding victory in the 2019 General Election confirmed what Labour Leave voters thought of their own party. It had not only ignored their referendum vote, but despised them for having cast it.

So Labour made a tactical decision to say as little as possible about Europe.

Not wanting to reopen the issue, it would accept the parameters of the exit deal negotiated by Boris Johnson – that is to say, an exceptionally close trade arrangement, the only one the EU has signed with no tariffs or quotas, but with the freedom to set our own regulations.

So things stood until – well, until a couple of weeks ago, when Nigel Farage's entry with Reform UK into the race moved the opinion polls.

With the Conservative vote split, Labour can now reasonably expect to win more (possibly a lot more) than 400 seats in Parliament.

Keir Starmer greets the president of the European Union Commission, Ursula von der Leyen earlier this year

Although it seems vanishingly unlikely that Reform UK will win more than a handful of constituencies – most opinion polls suggest zero – it will cost the Tories more than a hundred, leaving it weaker than at any time in its three-and-a-half centuries of existence.

Labour can relax. It can say what it really thinks and then claim after the election that it has a mandate.

A mandate for what exactly? Rachel Reeves, the shadow Chancellor, in a terrifying interview published yesterday, talks of signing up to EU rules on financial services, chemicals regulation and workers' rights.

It is important to be clear about what she is proposing. Not a market-only association, with its own arbitration mechanisms, of the kind pioneered by Switzerland. That is a legitimate option. Indeed, had we gone for it at the outset, Brexit might have been altogether simpler, swifter and smoother.

No, what Reeves is offering is unilaterally to accept whatever rules are decided in Brussels in exchange for easier access to EU markets.

For the City, this makes no sense. London would place itself under the control of envious rivals, who make no secret of wanting to see it displaced by Paris, Frankfurt and Milan.

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But these cities are not London's competitors. Its competitors are New York, Singapore, Shanghai and, increasingly, Mumbai.

These financial hubs would like nothing more than to see Britain's chief industry back under the control of Eurocrats – only this time with no say.

'I don't think anyone voted Leave because they were not happy that chemicals regulations were the same across Europe,' said Reeves.

As a matter of fact, when the EU introduced its chemicals regime, known as REACH, in 2006, it was opposed by almost the entire industry in the UK.

The Government argued that there was no need for a prescriptive list of what chemicals could be imported. Far better to carry on with our previous risk-based approach, like Australia, Canada and other developed economies. Britain opposed the directive, but was outvoted.

Yet I have noticed a curious dynamic when it comes to regulations. Once companies have complied – to great cost and effort – they lose interest in protesting against them.

Worse, they want every firm to be subject to the same regulations. They therefore become advocates for the rules that, when they were acting from first principles, they opposed.

This dynamic made big chemical companies demand a British version of REACH. But the job of a shadow Chancellor is to think, not just of established corporates, but of start-ups, entrepreneurs, consumers and, above all, the national economy.

If prosperity were our aim, we would scrap the whole scheme and go back to a presumption in favour of importing chemicals unless there was a reason to think they were a problem. But Labour's real aim is to get back into the EU's good books.

That's also why it wants Britain to associate itself with the EU's defence structures, something we opposed even when we were members, seeing the whole scheme as likely to undermine Nato. And it's why Labour is looking for ways to wriggle out of its pledge not to rejoin the customs union.

While there are respectable arguments for the single market, there are no serious arguments for the customs union, the arrangement whereby EU states contract out their trade policy to Brussels, allowing it to set tariffs on their behalf.

For Britain, which used to be the only member that traded more with non-EU than EU states, this never made sense.

Sir Keir with his Shadow Chancellor Rachel Reeves on the campaign trail yesterday

Our future is with the 85 per cent of the global economy that lies outside the EU.

Hence our membership of the Pacific trade pact, which contains the fastest-growing countries in the world.

The EU would, I suspect, be prepared to pay a high price to get its hands on our trade policy again – even being prepared to do a deal with the Pacific bloc itself.

How would Labour square that with its pledge to stay out of the customs union? By presenting it as a pragmatic solution to problems created by the Irish border. Problems, incidentally, created wholly by Brussels.

Britain was always happy to allow unrestricted trade across that border. It was the EU that claims infrastructure was needed to protect its single market.

Step by step, Labour will bring us into line with EU rules and restrictions.

We will eventually be left like Bosnia or Albania, a state that has contracted out its regulatory regime to Brussels.

In those countries, the arrangement is expressly defended as a stepping stone to eventual membership. How long before Labour comes clean and makes the same argument?

• DANIEL HANNAN is International Secretary of the Conservative Party and serves on the Board of Trade.