More than 80 senior figures in the Labour Party have urged Jeremy Corbyn to commit to remaining in the EU single market after Brexit.

The group of MPs, MEPs, council leaders and trade unionists say investment plans cannot be funded if the UK retracts its membership.

It comes a day before Mr Corbyn is expected to commit Labour to backing a customs union with the EU.

Downing Street has already insisted the UK will leave that union.

In a statement seen by the Observer, figures including Lord Mandelson and trade union leaders Bill Morris and Tony Young say the party as a minimum “must clearly and unambiguously” set out to remain part of the European economic area.

They add that “if we want to build a modern, low-carbon economy that protects workers and tackles tax avoidance, we will only achieve it through collaboration and frictionless trade with our nearest neighbours.”

They say this is “the only way” of keeping existing benefits.

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Although they regard Mr Corbyn’s expected commitment on Monday as a “step forward”, they say this falls “way short” of where Labour should be on Brexit.

The group adds: “We can only properly fund services, schools, hospitals, social care and international development if our businesses thrive and our economy grows.”

The Labour leader has previously said membership of the single market is dependent on EU membership.

He came under pressure in the summer and committed to a policy of staying in the single market and the customs union for a “transitional” period.

Mr Corbyn said some form of customs union would need to be in place after Brexit but suggested existing arrangements needed improvements.

‘Streamlined’ customs checks

In a position paper published in August, the UK set out two potential options for future long-term customs operations.

A “partnership” arrangement would see the UK “align precisely” with the EU in terms of imports and exports, removing the need for any customs checks between the two.

The UK would continue to operate its own checks on goods coming from outside the EU – and safeguards would be needed to prevent goods entering the EU that had not complied with its rules.

An alternative scenario would involve the UK extending customs checks to EU arrivals but under a “highly streamlined arrangement” to minimise disruption at ports and airports.

Meanwhile, the Archbishop of Canterbury has called for “solidarity, courage, aspiration and resilience” as the UK heads towards Brexit.

Writing in the Mail on Sunday, the Most Rev Justin Welby said while the future remains uncertain “we must heal the divisions caused by the vote and accept the dissenting voice as well as the majority”.

Referring to immigration, he added that while integration is important, British society must also change, to create “a richer way of life”.