×

UPDATE 3-UK opposition Labour backs soft Brexit, putting pressure on May

* Opposition Labour throws weight behind soft Brexit

* Wants to stay in single market for unspecified time

* UK government to resume talks in Brussels on Monday (Adds comment from SNP leader)

LONDON, Aug 27 (Reuters) - The opposition Labour Party says it would keep Britain in the European single market and customs union for a transitional period after Brexit, offering a clear alternative to the policies of Prime Minister Theresa May.

The centre-left party would seek to maintain the "same basic terms" with the European Union, including the free movement of people, beyond March 2019 when Britain is set to leave the bloc, Labour's Brexit spokesman Keir Starmer said on Sunday.

Labour wanted to avoid a damaging "cliff edge" for the economy from an abrupt separation in less than two years.

It would also aim to keep a form of customs union with the EU, and would possibly agree a new relationship with the single market, subject to negotiations, Starmer added in the Observer newspaper.

Senior ministers in May's Conservative government have ruled out remaining in the single market and customs union during any transitional phase following Brexit.

Starmer said following EU rules for a period would allow goods and services to continue to flow between the EU and Britain without tariffs, customs checks or additional red tape.

Starmer's comments follow months of uncertainty and division on Labour's position, and are aimed at providing a springboard for party leader Jeremy Corbyn to potentially defeat the Conservatives in any new election.

May's grip on power has been weakened following a botched early general election in June in which she lost her parliamentary majority, making it harder for her government to maintain a united stance on Brexit.

NO TIME LIMITS

Labour recognised that a transitional deal would not provide long-term certainty, Starmer said, and it would not resolve the question of migration, one of the key issues for voters in the referendum in 2016.

"That is why a transitional period under Labour will be as short as possible, but as long as necessary," he added.

The Conservatives said Labour's position was a "weak attempt to kick the can down the road".

"Their leader can't say they would end unlimited freedom of movement, they can't decide whether we are leaving the single market and they have no vision for what Britain should look like outside the EU," a spokesman said.

"This week we will be heading out to negotiate a deal with the EU that avoids unnecessary disruption to people and businesses, and allows the UK to grasp the opportunities of Brexit. Labour are still arguing from the sidelines."

Nigel Farage, former leader of the anti-EU UK Independence Party, also criticised the Labour move.

"Corbyn promised he would leave the single market. He has now betrayed every Labour voter at the General Election," he said on Twitter.

The Scottish National Party supported Labour's stance, but said it did not go far enough.

Nicola Sturgeon, SNP leader and Scotland's first minister, said if the change in Labour's position was genuine and substantive, it was welcome.

But she said Labour needed to be unequivocal about Brexit.

"If we are leaving the European Union, which I regret deeply, then we must stay in the single market and the customs union," she was quoted as saying by the BBC.

"Not for some transitional period, but period."

Britain will return to Brexit talks on Monday after it sought to widen the debate by publishing a series of papers in the last two weeks on subjects ranging from future customs arrangements to data.

The EU wants to make progress on three areas -- the rights of expatriates, Britain's border with EU state Ireland and a financial settlement -- before moving on to the other subjects.

The talks restart as Britain's economy starts to show the strain of last year's vote to leave.

Starmer said Labour would make jobs and the economy a priority in any settlement.

"That means remaining in a form of customs union with the EU is a possible end destination for Labour, but that must be subject to negotiations," he added.

"It also means that Labour is flexible as to whether the benefits of the single market are best retained by negotiating a new single market relationship or by working up from a bespoke trade deal."

($1 = 0.7762 pounds) (Additional reporting by Elisabeth O'Leary; editing by Keith Weir and David Evans)