More than 80 senior figures from across the Labour Party have signed a statement warning Jeremy Corbyn that key policies would be unaffordable if the UK leaves the single market.
As well as hitting funding for schools, hospitals and social care, leaving the single market would also raise the prospect of a hard border between Northern Ireland and the Republic of Ireland that would threaten the Good Friday Agreement, the letter says.
The statement has exposed Labour’s internal divisions on how to proceed with Brexit on the eve of a speech by Mr Corbyn setting out the party’s approach.
Issued to The Observer, the letter – signed by 37 MPs, 12 peers and a number of union leaders – demands the party commits to maintaining access to the single market by remaining part of the European Economic Area.
It states: “Given the parliamentary arithmetic and the numbers of parliamentarians from other parties – including Conservative backbenchers – who have indicated they will join us in this endeavour, our country’s continued participation in a customs union and the single market is now in the Labour Party’s hands.
“For the sake of building a better Britain and safeguarding those our party was founded to protect, we must grab this chance before it is too late. We will never be forgiven if we fail to do so.”
The Labour Campaign for the Single Market includes MPs Chuka Umunna, Heidi Alexander and Alison McGovern and peers Baroness Lawrence and Lord Kinnock, former leader of the Labour party.
Another signatory, Harrow West MP Gareth Thomas, tweeted: “We must participate in the EU single market – for jobs, for influence; this is the most patriotic of the Brexit choices & it’s why I signed this statement/letter.”
Mr Corbyn has come under increasing pressure to clarify his position that he wants a “jobs-first Brexit”, which allows Britain to retain the benefits of the single market and customs union.
The Labour leader backed Remain in the 2016 referendum, but has previously indicated that he believed EU state aid rules would tie the hands of a left-wing government which wanted to offer support to home-grown industries.
Mr Corbyn is expected to use a speech in the Midlands on Monday to give more detail on Labour’s plans.
On Sunday, he was warned against shifting his position towards staying in a customs union with the EU by two senior Labour MPs.
Frank Field, who chairs the Commons work and pensions committee, told the Sunday Telegraph: “This is not what people voted for and it is playing with fire. We will lose northern seats if this happens. They (voters) know when they are being messed around.”
Prominent Leave campaigner Kate Hoey, a former Labour minister, told the paper: “I hope Jeremy will remember that in the last election our manifesto commitments on the EU helped ensure that many ex-Labour voters who had gone to Ukip came back to us on the understanding that he was committed to leaving the EU and not leaving in name only, which is what any form of customs union with the EU would mean.”
Pro-Remain Conservative MP Anna Soubry wrote on Twitter: “What an appalling situation, A majority support a Brexit which puts our economy first and foremost but is denied it by the leadership of the 2 main parties. It doesn’t have to be like this. Time to put country before party.”