May Wins Tight Commons Votes on Customs Bill: Brexit Update
(Bloomberg) -- Prime Minister Theresa May faces opposition to her Brexit plan from all sides and is fighting to put down a rebellion within her party.
A fractious debate on her customs bill in the House of Commons on Monday ended in the premier narrowly winning votes on two amendments which she accepted after they were tabled by euroskeptics angered at the softening of her approach to leaving the European Union.
That, in turn, triggered a backlash from Tory lawmakers who want to stay as close to the EU as possible after divorce from the bloc.
Commons Backs Customs Bill, Now Goes to Lords (11:15 p.m.)
After a night of tight votes on amendments, May’s customs bill passed its third reading comfortably by 318 votes to 285.
It now heads to the House of Lords where lawmakers are preparing further challenges to the legislation, which sets up arrangements for customs and cross-border taxation after Brexit.
May Squeaks Through Second Commons Test (10:40 p.m.)
May won another vote by a whisker, again on an amendment that was originally put forward by pro-Brexit Tories. This time, it was to force the government to ensure that the U.K. adopts a separate Value Added Tax regime from the EU.
Her majority was again cut to just three votes as she won by 303 to 300.
Another Minister Quits May’s Government (10:25 p.m.)
Whilst she won the vote with a majority of just three, May suffered a resignation from her government in the process, the BBC reported. Guto Bebb, a junior defense minister, quit and joined the rebellion against the prime minister’s customs plan.
Bebb is the latest member of May’s government team to quit over Brexit since she forced her blueprint through a crucial cabinet meeting at her Chequers country residence on July 6. He is the first to quit because she sided with her party’s Euroskeptics.
May wins first vote on Brexiteer amendment (10:00 p.m.)
May narrowly won the first of Monday’s crucial House of Commons votes on the pro-Brexit amendments that she has accepted -- but it was exceptionally close.
Despite an angry backlash from pro-EU Tories like Anna Soubry and Dominic Grieve, May won by 305 votes to 302.
As a result she must now try to persuade the EU to collect U.K. tariffs on goods destined for Britain as part of her Brexit plan.
Plan For Lawmakers to Take Early Vacation (9:30 p.m.)
As rumors of plots against Theresa May swirl around Westminster, a plan is being drawn up to send members of Parliament away on their summer vacation early.
The House of Commons will hold a vote on Tuesday on a move to break up early for the summer recess, according to a person familiar with the matter. The vacation is due to start on Tuesday 24 July but would begin at the end of business on Thursday 19 instead if lawmakers back the plan.
May is under pressure from both pro and anti-Brexit wings of her Tory party and has suffered a succession of resignations from her government team in protest at her plan to keep close ties with the EU.
It’s far harder for legislators to coordinate their opposition to May if they’re dispersed around the country or the rest of the world on vacation and Parliament is not sitting. An early vacation would certainly give welcome breathing space to the government.
Growing Anger As Votes on Customs Bill Approach (8:40 p.m.)
Former cabinet minister Nicky Morgan told an event in central London that she is "very very angry" about the Government backing down to Conservative Euroskeptics. She said she will vote against the amendments.
A head of steam is growing among anti-Brexit Tories and it could take as few as seven rebels to defeat the government if all opposition parties vote against it too.
Tory Anna Soubry earlier accused her colleagues of sacrificing jobs in the interests of Brexit at any cost. “What they have said in those private conversations is that the loss of hundreds of thousands of jobs will be worth it to regain our country’s sovereignty. You tell that to the people of my constituency,” she said.
"Nobody voted Leave on the basis that somebody with a gold plated pension and inherited wealth would take their job away from them,” Soubry added in an attack on her colleagues.
The first votes are scheduled at about 9 p.m.
Pro-EU Tories planning to rebel in vote (8:25 p.m)
Dominic Grieve, leader of the pro-EU rebels in May’s Conservative Party, says he will vote against the amendments, telling lawmakers that the Government has accepted changes to the bill it knows are inadequate and badly drafted. “It is just an exercise in bullying” and the tabling of them by Euroskeptics was malevolent, he says.
There is still “an exercise in deception and self deception” about the implications of leaving the EU, Grieve says.
Former Tory Education Secretary Justine Greening makes the case for a second referendum. Parliament “has reached stalemate and there are deep divisions in terms of people’s views. It’s time for the British public to have the final say,” she tells lawmakers.
Trying to fudge the issue won’t help, she adds .“Standing in the middle of the road is very dangerous. You get knocked down by traffic from both directions.”
Committee Chairs Warn on Trade Deals (6:20 p.m.)
While Brexiteers say a key benefit of leaving the EU is that the U.K. will be able to strike deals with other countries, “even a wide-ranging set of deals is unlikely to offset losses arising from leaving the single market and customs union in the short to medium-term,” according to Treasury Select Committee Chairwoman Nicky Morgan, a Tory lawmaker, and Angus MacNeil, her SNP counterpart on the International Trade Committee .
The joint letter to lawmakers says that any trade deals the U.K. does outside the EU would be “less deep and comprehensive” and with countries that are further away and less economically developed on average.
“It is therefore implausible that the economic benefits of free trade deals with non-EU countries could exceed the costs arising from leaving the single market and customs union in the short to medium-term,” they said.
Grieve Says Brexiters Trying to ‘Wreck’ Bill (5:57 p.m.)
Leading pro-European Tory Dominic Grieve says the only purpose of the Brexiters’ amendments is to “wreck” the customs bill. He calls the changes “useless” and that “the only intention behind their tabling was malevolent.”
His comments come during a lengthy speech from his Remainer colleague Anna Soubry, who questions whether businesses and manufacturers can thrive if they lose frictionless trade with the EU. She’s attacked by pro-Brexit lawmakers, and she criticizes the government for accepting the amendments.
“They clearly seek to undermine if not wreck the great advances that have been made in this white paper,” she says.
From across the aisle, opposition Labour lawmaker Chris Leslie says he fears the prime minister’s agenda being taken over by a “Trumpian hard Brexit” view.
Pro-EU Tories Strike Back at May Climbdown (5 p.m.)
If the government’s line is that nothing has changed, pro-EU Tories are unconvinced. “Are any statements of the government to be relied upon for more than a week or two?” former Chancellor of the Exchequer Ken Clarke asked Trade Secretary Liam Fox in The House of Commons.
Meanwhile the BBC reported that anti-Brexit Tories had their own furious meeting with chief whip Julian Smith, and accused the government of caving in. Two of them, Heidi Allen and Anna Soubry, said they will be voting against two of the amendments, effectively rebelling against what is now the government position, in order to support the government’s position of last week.
Are the Accepted Amendments Contradictory? (4:55 p.m.)
At first glance, there’s a contradiction between what the government proposals say -- “the U.K. is not proposing that the EU applies the U.K.’s tariffs and trade policy at its border for goods intended for the U.K.” -- and what the rebel amendment says, that the government can’t collect tariffs for the EU unless EU countries send an account of “duties and taxes collected in that country on a reciprocal basis.”
But if you think that, May’s spokesman James Slack has a message for you: “Your interpretation is wrong.” Her officials are insistent that there is no contradiction. This is a lawyers’ debate, but one point worth keeping in mind is that the EU would only need to collect tariffs for the U.K. if Britain decided to levy higher duties than the EU, not an eventuality anyone thinks is likely.
Fox Offers Consultations on New Trade Deals (4:40 p.m.)
International Trade Secretary Liam Fox is setting out how the government will go about negotiating new trade agreements, from April 2019, when the U.K. will no longer be in the EU.
Speaking in the Commons after May, he said there will be public consultations for every new free trade deal, lasting 14 weeks, so people can “share their objectives and concerns.”
Fox said Parliament must be able to scrutinize new trade agreements. Some "confidentiality" will be needed, as in any negotiation, he added.
May Insists her Brexit Plan Is Not Dead (4:25 p.m.)
Labour lawmaker Stephen Kinnock told May that the fact she caved in to the Tory euroskeptics shows her Brexit plan -- agreed at her Chequers country residence -- is “dead in the water.”
May disagreed. “He’s absolutely wrong,” she told the House of Commons. The amendments which the government is now accepting “do not change that Chequers agreement” and a minister will be making this clear later, she said. May added she would not have worked so hard to get a deal her cabinet could unite behind only to throw it away so soon.
Number 10: Climbdown ‘Consistent’ with Chequers (4:15 p.m)
May’s spokesman James Slack tells reporters that the amendments tabled by Brexiteers and accepted by the government are “consistent with the white paper.”
Slack says that the amendments do not contradict the White Paper’s proposal for collecting tariffs. "The formula will deliver that reciprocity,” he says.
Pro-Brexit Tories Force May to Back Down (3:35 p.m.)
Euroskeptic rebels in the Tory European Research Group have forced May to retreat in order to avoid a damaging revolt in a vote on a key piece of Brexit law later on Monday.
The rebels have been holding talks with government whips and have persuaded May’s team to accept their proposed amendments to her Brexit plan.
It’s important because it will add another complication to May’s negotiations with the European Union. The prime minister will now have to ask the EU to collect the U.K.’s customs duties as part of her blueprint for a new arrangement with the bloc after Brexit.
May was originally proposing to collect EU tariffs but one of the key amendments -- proposed by Priti Patel -- would ban her from doing this unless there was a reciprocal agreement in place for the EU to collect duties due on goods destined for the U.K.
Speaking earlier, Patel told Bloomberg that May’s plan meant giving more away to the EU, rather than taking back control. “We are going to become a tax collector for them,” she said. “The white paper isn’t a white paper, it’s a white flag.”
Brexiters Set May Ultimatum as Rebellion Grows (1:41 p.m.)
U.K. Prime Minister Theresa May faces a new ultimatum from euroskeptics in her Conservative Party: accept their demands to tear up her Brexit plan, or trigger a revolt that would threaten her grip on power.
Since she pushed through a proposal to keep close ties to the European Union single market, May has suffered the resignation of nine members of her government team in protest, including two key ministers -- Foreign Secretary Boris Johnson and Brexit Secretary David Davis.
The pro-Brexit wing of the Tory party is now mobilizing against May’s plan, which is set out in a so-called white paper, and will propose a series of changes that would effectively re-write it. May is now weighing whether to accept the amendments, even though they would bind her hands in negotiations.
“This white paper is not a white paper it is a white flag,” Priti Patel, a pro-Brexit former cabinet minister who is proposing the new clauses, said in an interview. “These amendments are about taking back control, delivering the Brexit the British public voted for, and putting our country first.”
The stakes are high. May has just three months to negotiate the final withdrawal treaty and a framework for the future trade agreement ahead of a self-imposed deadline of October. Progress has stalled, mainly because the bloc has been waiting for the U.K. to say what it wants.
If May confronts her Tory critics, forcing them to vote against her and reveal their strength, she takes the risk that if a large number do so, it could precipitate her downfall. The amendments are backed by pro-Brexit campaigners including Jacob Rees-Mogg, and some media reports have put the number of Tory lawmakers considering voting for them at more than 100.
But if the prime minister accepts the amendments in the hope of reversing them later on, she would be accepting that she doesn’t have the internal support to deliver her plan, something else that could see her forced out.
May finally pushed her vision of a soft Brexit through Cabinet on July 6, but Johnson and Davis quit two days later because they could not support the plan to keep the U.K. tied to EU regulations on the trade of goods forever. May says her plan is the only one possible.
Two officials in May’s office said the government is considering accepting the rebel amendments, meaning all Tories would likely support them.
There are four key amendments to the Taxation (Cross-Border Trade) Bill that pro-Brexit lawmakers are putting forward for debate on Monday. The first is the most difficult for May, because it would ban her from implementing her plan to collect EU customs duties after Brexit unless the EU agrees to collect tariffs on behalf of the U.K. -- something she’s not even proposing to ask for in the negotiations.
The second would prevent the U.K. from entering into a post-Brexit customs union with the EU, without a specific new piece of legislation. This would stop the premier accepting the result of a vote in Parliament from pro-EU lawmakers in her party, as well as opposition Labour legislators, who are plotting to keep the U.K. in a customs union.
Another new clause would require the U.K. to maintain a separate value-added tax regime from the EU, whilst the fourth would stop May accepting the EU’s proposal for avoiding a hard border with Ireland.
“The Government unfortunately believes that Brexit is not a good thing in itself,” Rees-Mogg told the BBC’s “Sunday Politics” program. “It seems to think it has to be tempered with non-Brexit.”
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