Peers have inflicted an embarrassing defeat on the government after voting in favour of remaining in a customs union with the EU after Brexit.
In a challenge to Theresa May’s flagship Brexit bill, members of the Lords backed several cross-party amendments supporting continued membership of a customs union with the bloc, and protecting people’s rights after Brexit.
The result will be embarrassing for the government, as ministers race against time to get the EU (Withdrawal) Bill through parliament in time to prepare for Britain’s exit for the bloc next year.
It could also embolden MPs to amend the bill – and force the prime minister to rethink her position – when it returns to the Commons, after undergoing days of intense scrutiny in the upper chamber.
Labour’s shadow Brexit secretary Keir Starmer hailed the move, and called on the prime minister to “listen to the growing chorus of voices who are urging her to drop her red line on a customs union”.
However, a Brexit Department spokesperson said the amendment did not commit the UK to staying in a customs union – something Ms May has repeatedly ruled out.
Labour, the Liberal Democrats, crossbenchers and backbench Tories joined forces to successfully back two key amendments, on the first of a six-day report stage in the House of Lords.
Leading the drive, crossbench peer Lord Kerr of Kinlochard (the architect of Article 50), argued there was a need to try to “limit the damage” of the UK leaving its largest market.
He said: “The country voted narrowly to leave the European Union, but no one can argue that it voted knowingly to leave the customs union with the European Union.”
But Brexit minister Lord Callanan said the government did not support the measures, as it would require it to report to parliament on the steps taken towards delivering an objective it has “clearly ruled out”.
He also signalled the government’s intention to overturn the measures at a later stage, saying before the vote it had no intention to “reflect further” on the matter.
The rebels faced accusations they were trying to “wreck this bill and prevent Brexit” from Tory Eurosceptic Viscount Ridley, while Conservative former chancellor Lord Lawson dismissed it as a “wrecking amendment”.
Later, peers also inflicted a second defeat on the government after they approved another amendment, which aims to protect citizens’ rights after Brexit,
Pro-EU campaigners seized on the news as a sign of the shifting mood in favour of a softer Brexit.
Sir Keir said the move was “an important step forward”, and would provide the only solution to avoiding a hard border in Northern Ireland after leaving the EU.
He said: “Theresa May must now listen to the growing chorus of voices who are urging her to drop her redline on a customs union and rethink her approach.”
Liberal Democrat leader in the House of Lords, Lord Newby, said: “This is a hugely significant moment; the House of Lords has come together to show the government that remaining in a customs union is key to the UK’s future prosperity.
“Securing this win on a cross-party basis rams home how out of touch the government have been on this issue, and that they drastically need to change tack from the destructive hard Brexit they are pursuing.”
Labour’s Chuka Umunna, a supporter of the People’s Vote campaign, said: “I know there is a growing cross-party movement in the Commons to halt plans to take us out of the Customs Union, because of the threat it poses to the Good Friday Agreement settlement on the island of Ireland and to trade with our biggest economic partner.
“Ministers would do well to listen to that and to the growing support for a People’s Vote on the final Brexit deal.”
A Brexit Department spokesperson said they were “disappointed” that Parliament had backed the amendment as the bill is designed to prepare the ground for leaving, rather than setting the terms of Britain’s exit.
“This amendment does not commit the UK to remaining in a customs union with the EU, it requires us to make a statement in parliament explaining the steps we’ve taken,” the spokesperson said.
“Our policy on this subject is very clear. We are leaving the customs union and will establish a new and ambitious customs arrangement with the EU while forging new trade relationships with our partners around the world.”
Twenty-four Tory peers rebelled against the Government to back the amendment, including former cabinet ministers Lord Heseltine, Lord Lansley and former minister Lord Willetts.