U.K. Labour Lords See Brexit Defeat for May over Customs Union

(Bloomberg) -- The U.K. Labour Party expects to defeat Prime Minister Theresa May in the House of Lords this week in a move that could force her to shift her Brexit policy toward closer ties with the European Union.

The main opposition has teamed up with Lords from May’s Conservatives, as well as Liberal Democrats and independents to sponsor more than a dozen amendments to the government’s landmark Brexit legislation. The key one would tell the government to keep the U.K. in a customs union with the EU after Brexit, a policy that businesses back but May rejects.

On eight issues -- including the customs union -- there’s the prospect of defeating the government by 50 votes or more, according to Labour’s Brexit spokeswoman in the Lords, Dianne Hayter.

“All the serious amendments have got a Tory, a crossbencher, a Lib Dem and a Labour peer: the whole house has been covered,” Hayter said on Monday in an interview in Parliament. “I’m pretty optimistic that unless the government makes some meaningful concessions on some of them that we should get them through.”

It’s still not clear how the government would react to a defeat, and to what extent the amendments will force May to change her policy. At the very least, it will add to the pressure on her to execute a U-turn and stay in a customs union.

There’s probably also a majority in the lower house of parliament in favor. While May has repeatedly ruled out staying in the customs union as it would prevent Britain having its own trade policy, some in her administration back the idea.

One official said the government would likely oppose the amendment if it was sent back to the House of Commons. However, another official said the clause only requires the government to explain what it has done to try to stay in a customs union -- something it could easily do with no impact on policy. The Lords vote will be on Wednesday.

“I certainly know a number of Tories who I won’t name, but who are absolutely going to vote with us on the customs union,” said Hayter. The amendment is also one that stands a good chance of gaining traction in the elected House of Commons when the bill is handed back to the lower chamber, she said.

Rebel Conservatives

At least 10 of May’s own Tories have backed an amendment to a different bill in the lower house calling for a customs union -- enough on paper to defeat her in the Commons. That bill has been delayed.

“Mrs. May daren’t put that to the Commons at the moment, so she’s obviously worried that she wouldn’t win it,” said Hayter.

If the Lords pass the customs union amendment, it’ll bring the issue to a head in the Commons, according to one of its sponsors, John Kerr, an independent who helped draft the now famous Article 50 that governs the Brexit process.

"One doesn’t want to count one’s chickens, but I think there’s quite a lot of support in the Lords for the amendment,” he said. “Now comes the moment when we must crystallize our thoughts."

Whether amendments approved in the Lords then have traction in the lower chamber depends on the size of the majority, according to Hayter.

That’s because while the Lords typically defer to the elected house after a bill has been passed between the two chambers two or three times, a large majority in the Lords may be enough to embolden Tory rebels in the Commons, where May has a wafer-thin majority.

Aside from the customs union and protections for environmental and workers’ rights, other areas covered by cross-party amendments in the Lords seek to:

  • Limit the scope of so-called Henry VIII powers that would allow ministers to bypass Parliament in changing laws and regulations
  • Go beyond a successful rebel amendment in the Commons in December that secured a meaningful vote for lawmakers on May’s final Brexit deal by giving Parliament even more of a say over whether the premier should seek a new deal or leave the EU without one
  • Protect the peace process in Northern Ireland
  • Remove the government’s fixed Brexit day of March 19, 2019 to give added flexibility
  • Facilitate future U.K. cooperation with EU agencies

The amendments are set for discussion during six sessions in the Lords, scheduled for April 18, 23, 25 and 30 and May 2 and 8.

©2018 Bloomberg L.P.