The Secretary of State for Exiting the European Union said Labour’s position would put two “serious breaches” of Labour’s manifesto into play and put jobs at risk by surrendering one of the “central prizes” of Brexit.
He said: “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.”
Mr Davis also highlighted internal Labour divisions over the policy, which one member of the shadow cabinet previously said was “deeply unattractive” and would represent a “disaster” for Britain’s trade policy.
Mr Corbyn is expected to use a major speech in Coventry to announce that he wants to keep Britain in the customs union on Monday.
The idea of such a move has created a deep split within the Conservative Party as it would mean that Britain could not sign its own trade deals with non-EU countries after Brexit.
Five pro-European “mutineer” Tories recently tabled an amendment which could force Theresa May to accept a post-Brexit customs union.
On Sunday, Labour indicated that it is prepared to back the amendment.
With the Government facing such a significant threat to the Prime Minister’s leadership, Mrs May set out a “red line” to rule out staying in any form of Customs Union last month.
Nonetheless, pro-European Tory MPs said they believe that Mrs May could back down on the issue in a major Brexit speech on Friday.
The speech is pegged to confirm more expectations of Britain’s continual relationship with the EU.
Tory Eurosceptics warned that any concession over the customs union issue would provoke a significant backlash and could leave the Prime Minister facing a leadership challenge.
One said: “They can’t keep us in the Customs Union by another name. It would be a hokey-cokey amendment, one foot in and one foot out. It would be a complete sellout. If she does this the letters will go in [to trigger a leadership contest].”
Labour has denied that it is in breach of its manifesto, highlighting a pledge to “retain the benefits of the Single Market and Customs Union”.
The party is planning to form “a” Customs Union after Brussels said the UK cannot be part of “the” Customs Union after Brexit.
In Corbyn’s Coventry speech, he is anticipated to say: “The European Union is not the root of all our problems and leaving it will not solve all our problems.
“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.”