What does Labour’s statement on Brexit policy really mean?

Labour has taken a significant step forward on its slow march towards campaigning for the UK to remain in the EU, but has still not reached a final destination.

The shadow cabinet agreed on Tuesday to support a Final Say referendum if Theresa May’s successor proposed a new Brexit agreement or tried to leave without a deal on 31 October. Crucially, Labour would campaign for Remain in such a referendum.

However, Jeremy Corbyn is keeping his options open about the party’s position at a general election – a growing prospect, as Boris Johnson, the clear frontrunner in the Tory leadership race, might seek an election if the Commons blocks no deal, while MPs could force an election to stop a crash-out.

Labour pro-Europeans believe that it would now be inconceivable for the party to fight an election without supporting the “two Rs” – referendum and Remain. But Mr Corbyn has not gone that far. Labour’s manifesto will be decided when an election is called, leaving open the possibility that a Labour government could seek its own Brexit deal, based on a customs union.

If that were put to a confirmatory referendum, many Labour figures would have a dilemma. It would be virtually impossible for the leadership to campaign against its own agreement, but Mr Corbyn might permit his ministers and MPs to campaign either for the deal or Remain. He has been reading up on how Harold Wilson, the then Labour prime minister, allowed such freedom in the 1975 Europe referendum.

For now, Mr Corbyn is still trying to appeal to Remainers and Leavers, and can’t keep everyone happy. His support for a referendum and a Remain vote on any Tory deal has angered pro-Brexit Labour MPs representing Leave areas in the north and midlands, who warn it will cost the party the next election. But keeping alive a Labour deal does not go far enough for some Labour Remainers, and allows the Liberal Democrats and Greens to argue that Labour is still pro-Brexit.

There could be pressure on Mr Corbyn to come out unequivocally for Remain at Labour’s annual conference in September. Without that, Labour might still struggle to explain its complex policy on the doorsteps.

Labour's new stance makes it slightly more likely that there could be a Commons majority for a Final Say referendum. In a Commons vote in April, 203 Labour MPs supported a people’s vote and 24 opposed it, while 20 abstained, some of whom might now back the move if the new prime minister put a revised deal to MPs.

In April, a referendum was defeated by 12 votes. Only 14 Tory MPs supported the proposal, so more would probably be needed to forge a majority. That could happen if a Final Say vote became a mechanism to stop no deal. But time would be very short. A government actively pursuing no deal could ignore a non-binding Commons vote for a referendum, and refuse to bring in the necessary legislation. So opponents of a crash-out may have to find other ways of preventing one.

Labour’s shift towards Remain might just increase the temptation for PM Johnson to seek a mandate for no deal at an election, as he eyed up marginal seats in the north and midlands. Then Mr Corbyn could no longer put off his final decision on whether Labour should become a Remain party.