Labour would vote against a government plan designed to resolve the impasse in the Brexit negotiations on Northern Ireland, the shadow chancellor said.
John McDonnell has told Newsnight that Labour would reject any customs arrangement with the EU unless it was established on a permanent basis.
Theresa May hopes to avoid a hard border in Northern Ireland through a temporary UK-wide customs arrangement.
Mrs May plans to have an agreement with EU leaders by the end of this month.
Such a move from Labour would raise the chances of Parliament rejecting her withdrawal agreement.
It is understood the prime minister believes that an agreement with EU leaders needs to be reached no later than the final week of November to allow it to pass parliamentary hurdles in Westminster and Strasbourg.
That means a deal needs to be agreed with the EU’s chief negotiator Michel Barnier by around 21 November to give the EU a week to prepare for an emergency summit of EU leaders.
Mrs May is due to brief the cabinet on Brexit on Tuesday morning.
The prime minister’s customs arrangement is known informally in No 10 as a customs union.
Downing Street is facing calls from ministers for the UK to be allowed to end it unilaterally, a demand that has been rejected by the EU and Dublin.
The No 10 initiative for an all-UK customs arrangement is designed to replace an EU proposal to create separate customs territories for Northern Ireland and Great Britain. The prime minister has rejected this on the grounds that it would lead to an internal UK border down the Irish Sea.
Asked by Newsnight whether Labour could vote for a deal in which the whole of the UK was placed in a customs union with the EU for a temporary period, Mr McDonnell said: “I can’t see it because I think it would be the worst of all worlds. What I’m getting from business leaders, trade union leaders and others is they want permanence, they want stability.”
‘Let us negotiate’
Labour, which has advocated UK membership of a customs union for the past year, has said that it would vote down the prime minister’s Brexit deal unless it passes six tests set by the party.
These include delivering the “exact same benefits” as the UK enjoys as a member of the single market and the customs union.
The shadow chancellor’s remarks to Newsnight show that he wants permanent membership of a customs union to apply in all circumstances. This includes what is intended by No 10 to be a temporary “backstop” period after the end of the transition period in December 2020, if a future trading relationship has not been finalised by then.
“If the government says ‘well a customs union for a couple of years or maybe customs union until we decide there won’t be one,’ well actually, that doesn’t give the stability for investment for anyone,” McDonnell said.
“What I’m worried about is Theresa May comes back from Europe waving a piece of paper – and it won’t be Winston Churchill, it’ll be more like Neville Chamberlain. What we’ll see is peace in our time that will then disintegrate over time.
“I’d rather she just came back and told us. If she can get a deal that protects jobs and the economy we’ll vote for it, but it can’t be half in half out.
“If she can’t deliver, we can’t vote for it – move to one side and let us do the negotiations.”
The shadow chancellor indicated that if Parliament rejects a Brexit deal proposed by Theresa May, the EU might be prepared to renegotiate with a new UK government.
Labour believes that if Parliament votes down a Brexit deal a general election should be held.
“All the messages that we get back over this whole period is that our European partners desperately want what we want: a deal that will protect their jobs and their economies in the same way that we want to,” he said.
“If they recognise the deal is unacceptable to Parliament I think that opens up a vista of the opportunity of real negotiations… In the EU you negotiate on the basis of mutual interest and mutual respect. You don’t negotiate on the basis of banging on the table, threatening to walk out every five minutes.”
Watch the full interview on Newsnight on Monday, 22:30 on BBC Two or online.