There is a way out of the Brexit maze for Theresa May – but it will involve cabinet resignations

A permanent customs union could be sold as making it less likely the backstop would ever be needed. It might just help to persuade the DUP to back May’s deal

The divisions opening up inside Labour over Brexit are good news for Theresa May, and might help her secure a Commons majority for a version of her deal. But here’s the surprise: the Labour splits might also be good news for Jeremy Corbyn.

On Tuesday, 14 Labour MPs voted against their colleague Yvette Cooper’s plan to delay the UK’s exit by up to nine months. Another 11 defied a three-line whip by abstaining, including eight frontbenchers who, unusually, have not been sacked or reprimanded. It’s a sharp contrast to Corbyn’s sacking of Owen Smith from the shadow cabinet for calling for a Final Say referendum last March, when it was not Labour policy.

The 25 strong Labour rebellion has rightly raised hopes in Downing Street that an even bigger slice of Labour MPs might be won round to supporting May’s deal. That is why the government is wooing Labour MPs and trade union leaders with promises to protect workers’ rights, health and safety and environmental standards, and offering to splash the cash in “left behind” Leave voting areas represented by Labour.

But to build wider support among Labour MPs, May will have to erase one of her red lines, and accept a permanent customs union with the EU. Another group of Labour MPs, who are worried about a no-deal Brexit, will tell ministers during cross-party talks next week that they want a customs union to ensure frictionless trade for the manufacturing industries in their patches. A customs union is Labour policy. Corbyn was rebuffed by May when he pushed for it at their meeting on Wednesday. But some cabinet ministers support a customs union and think May will have to come round to the idea. Whitehall sources tell me that work on a customs union is under way “so we are ready if the politics moves”.

If May does so, she would have ticked the boxes Corbyn sketched out last September needed for Labour to back a deal – on a customs union, workers’ rights and the environment. Despite that, I doubt the Labour opposition would formally back May’s deal. Corbyn wants it to be a “Tory Brexit” in case the economy takes a hit. But I don’t think he would lose sleep if May secured a majority with the help of Labour MPs. This explains his refusal to discipline this week’s frontbench rebels, or to join pro-EU Labour MPs in condemning their colleagues for being “bribed” with government grants for their constituencies.

Commons approval of a deal without the opposition’s formal support would allow Corbyn to avoid the agonising choice he has repeatedly put off: will he enable or block Brexit, alienating either Remainers or Leavers? So the Labour “rebels” would not really be rebelling at all. Corbyn would have found a third way that Tony Blair would have been proud of. He could, and would, claim a victory in softening an even worse Brexit if May endorsed a customs union.

Such a move could persuade EU leaders to offer concessions on the backstop to prevent a hard Irish border; the EU has always said it would be more flexible if the UK’s red lines changed. Jean-Claude Juncker, the European Commission president, is reported to have told May that a customs union is the price of changes to the backstop.

Crucially, a permanent customs union could be sold as making it less likely the backstop (which includes a temporary one) would ever be needed. It might just help to persuade the Democratic Unionist Party to back May’s deal. If that happened, some of the 118 Tories who opposed the agreement last month would follow suit.

May is not convinced yet. When her chief of staff Gavin Barwell urged her to reach out to Labour by opting for a customs union, she sided with chief whip Julian Smith and Tory chairman Brandon Lewis, who warned the move could lose the votes of 40 Tories who backed the deal last month, and even result in the party splitting. If true, the parliamentary numbers would not add up.

The prime minister knows that being able to strike trade deals around the world is a tablet of stone for her Eurosceptics. A customs union would restrict that, and probably provoke cabinet resignations, including that of Liam Fox, the international trade secretary. But might May, too, seek a third way in which a customs union for goods would not prevent trade deals on services? If the backstop were tweaked, some Eurosceptics would vote for a deal. If a customs union were included in the non-binding political declaration alongside the withdrawal agreement, some hardline Brexiteers might bank on removing it when May’s successor took over the talks on a long-term trade agreement, and back her deal.

So there could yet be a way out of the Brexit fog for May. But to find it, she might have to make another U-turn, and accept a customs union.