Jeremy Corbyn will insist Brexit does not have to be a disaster as he commits Labour to pushing for a “new, strong relationship” with the single market.
The UK must have its own version of the deals other neighbouring countries such as Norway and Turkey have to access the internal trading bloc, the Labour leader will say.
In a speech on Brexit in Coventry, he will say existing single market rights, standards and protections would be accepted by Labour.
But it would negotiate protections and exemptions that could help workers and industry, such as changing state aid restrictions to allow governments to intervene to help struggling sectors.
Brexit Secretary David Davis said Mr Corbyn’s plans breached the promises he made at the general election and accused him of selling “snake oil”.
Labour’s “jobs first” approach would include measures to stop employers being able to import cheap agency labour from abroad to undercut workers’ pay.
Mr Corbyn will say: “Every country that is geographically close to the EU without being an EU member state, whether it’s Turkey, Switzerland, or Norway, has some sort of close relationship to the EU, some more advantageous than others.
“Britain will need a bespoke relationship of its own. Labour would negotiate a new and strong relationship with the single market that includes full tariff-free access and a floor under existing rights, standards and protections.
“That new relationship would need to ensure we can deliver our ambitious economic programme, take the essential steps to upgrade and transform our economy, and build an economy for the 21st century that works for the many, not the few.
“So we would also seek to negotiate protections, clarifications or exemptions, where necessary, in relation to privatisation and public service competition directives, state aid and procurement rules and the posted workers directive.”
“We cannot be held back, inside or outside the EU, from taking the steps we need to support cutting edge industries and local business, stop the tide of privatisation and outsourcing or prevent employers being able to import cheap agency labour from abroad to undercut existing pay and conditions.”
The Labour leader’s comments are set to upset some in the party who want the UK to remain in the single market.
A letter backed by more than 80 senior figures warned the leader his plans for investment in schools, hospitals and social care would be unfundable unless the UK stays in the internal market.
But Mr Corbyn is expected to set out how Labour would commit to the UK being part of a customs union.
Labour has had “many weeks of discussion unanimously” and agreed to develop its policy, shadow Brexit secretary Sir Keir Starmer said.
“The customs arrangements at the moment are hardwired into the membership treaty so I think everybody now recognises there’s going to have to be a new treaty – it will do the work of the customs union,” he told BBC One’s The Andrew Marr Show.
Prime Minister Theresa May has ruled out membership of the single market or customs union after Brexit, a move that has angered Tory Remainers.
Mr Corbyn will say leaving the European Union does not mean Britain is inevitably doomed.
The reality of Brexit is “more down-to-earth” than the naysayers and the fervent supporters claim, according to the Labour leader.
“The European Union is not the root of all our problems and leaving it will not solve all our problems,” he will say.
“Likewise, the EU is not the source of all enlightenment and leaving it does not inevitably spell doom for our country.
“There will be some who will tell you that Brexit is a disaster for this country and some who will tell you that Brexit will create a land of milk and honey. The truth is more down-to-earth and it’s in our hands: Brexit is what we make of it together.”
Critics have repeatedly accused Labour of failing to spell out clearly its approach to Brexit, but Mr Corbyn will insist the party has been consistent.
He will say: “Our message has been consistent since the vote to leave 20 months ago. We respect the result of the referendum. Our priority is to get the best deal for people’s jobs, living standards and the economy.
“We reject any race to the bottom in workers’ rights, environmental safeguards, consumer protections, or food safety standards.”
In an article for The Daily Telegraph, Mr Davis said Labour’s plans would stop the UK from signing free trade deals with other countries around the world.
He wrote: “The only way we can do this is if we have control over our own trade policy and are able to tailor agreements to our own needs, not those of 28 different countries. Being inside a customs union would make this impossible.
“These were points not lost on Labour at the last election when they promised to ‘work with global trading partners to develop “best-in-class” free trade and investment agreements’.
They are now certain to throw this opportunity away in favour of a system for which the only existing precedent is Turkey. This would see the EU offering access to the UK market in their third country negotiations, without any reciprocal access for the UK.”
“But the second manifesto breach is even more important, since it is not just about the opportunities of leaving, but whether we would have left at all. Labour’s customs plan would surrender control over our trade defences,” he added.
“Labour may think they have stumbled across a simple solution to Brexit, but there is a lesson they are yet to learn: if it looks like snake oil, and it smells like snake oil, don’t expect it to make you feel better.”
TUC general secretary Frances O’Grady said: “A customs union with the EU is a welcome step. It’s right to acknowledge the benefits the UK gets from being part of the single market – and to seek to protect those benefits into the future.
“Currently, it looks like the best way to protect jobs, guarantee a level playing field for workers’ rights and safeguard the Good Friday Agreement is to stay in the single market and customs union.”