More than a dozen Labour MPs have defied the party whips and voted in favour of the UK rejoining a customs union with the European Union.
The group, which included Dame Meg Hillier, the influential chair of the Treasury select committee, backed the Liberal Democrat motion in the Commons despite calls from party managers to abstain from the vote.
As a result, the Liberal Democrat Ten-Minute Rule Bill passed the Commons with a majority of one, after the deputy Speaker cast the deciding vote in its favour.
Dame Meg Hillier, the chair of the Treasury select committee, voted to rejoin the customs union
HOUSE OF COMMONS/REUTERS
A Labour source said the rebels would not be punished as the instruction to abstain had been only “advisory”.
While the vote is not binding, the Labour rebellion is further embarrassment to Downing Street after the deputy prime minister, David Lammy, suggested last week that he was in favour of a change in approach towards rejoining a customs union.
“That’s not currently where we are,” Lammy told the News Agents podcast.
But he added: “You can see countries like Turkey with a customs union seemingly benefiting and seeing growth in their economy. That’s self-evident.”
Britain voted to leave the EU in a 2016 referendum
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Starmer has insisted that Labour will not change policy on the customs union after ruling out membership of that and the single market in the party’s manifesto last year.
However, a growing number of influential figures in the party are calling for a rethink amid concerns that the government’s current reset will not significantly increase economic growth.
Studies have estimated that UK GDP is about 4 per cent less than it would have been if the UK had remained within the customs union and single market. In contrast, Starmer’s reset with the EU, which should reduce trade friction at the border, is expected to increase GDP by only about 0.3 per cent.
Some Labour ministers and MPs are privately calling on the prime minister to commit to rejoining a customs union with the EU as part of the party’s manifesto going into the next election.
Baroness Minouche Shafik, Starmer’s new economic adviser, even suggested bringing it forward as a potential growth measure in the budget.
Minouche Shafik, director of the London School of Economics, has also suggested a change in policy
JASON ALDEN/BLOOMBERG VIA GETTY IMAGES
The UK-EU Customs Union (Duty to Negotiate) Bill was tabled by Al Pinkerton, the Liberal Democrats’ Europe spokesman, as a so-called “ten-minute rule” bill.
It ended in a surprise tie of 100 votes to 100, giving the deputy Speaker the casting vote in which she backed the bill in line with convention.
Bills tabled in this manner cannot become law without government support, but they do allow MPs to make a case for new legislation.
Pinkerton called on MPs to “find the courage” to admit publicly that Brexit had been an “abject economic failure”.
“It choked business investment, shattered economic resilience, strangled trade, shrunk the economy and left every single one of us poorer,” he said.
“The economic benefits of Brexit were only ever an illusory mirage.”
But Dame Priti Patel MP, the shadow foreign secretary, said rejoining a customs union with the EU would be a “complete betrayal of the 2016 referendum result”.
“Following David Lammy’s comments last week, and now Labour MPs failing to stand against a customs union, Keir Starmer must commit to never trying to take us into the EU by the back door,” she said.
The Liberal Democrats’ deputy leader, Daisy Cooper, had earlier clashed with the chancellor Rachel Reeves over the UK’s ties with the European Union.
Cooper said the Brexit deal had “wrapped up British businesses in red tape and has blown a hole in the public finances”, and called on Reeves to back the bill.
But Reeves replied: “Since we came into office last year, we’ve reset our relationship with the EU, which is why last May we agreed with the EU an expansive set of changes to our relationship, including on food and farming, on electricity and energy trading, and also on youth mobility and Erasmus.”
She added that the government was “taking opportunities to trade more with fast-growing economies around the world, including India, and also by getting the first and the best trade deal that anybody has secured with the US”.
Ed Davey, the Liberal Democrat leader, claimed the vote was a “historic victory”.
“Across the country, people are crying out for real change and a solution to the cost of living crisis,” he said. A customs union with the EU is the single biggest step the government could take to grow our economy, put money back into people’s pockets and generate billions for our public services, he said.
“The prime minister must now listen to parliament and the public, drop his self-imposed red lines and finally go for proper growth through an ambitious trade deal with the EU.”