In the Lords’ hands
The U.K. government faces a tough Brexit week with a crucial vote in Parliament
Theresa May’s government faces another bracing week in its Brexit calendar. With the House of Lords expected to vote in favour of continuing in the common customs union, this may set the tone for Parliament’s final vote later this year on Britain’s withdrawal from the European Union. This week’s vote on an amendment to the exit bill is likely to be a replay of the scenario that played out in the House of Lords last year, when peers across party lines handed a bruising defeat to Prime Minister May on the rights of millions of EU citizens in post-Brexit Britain. The controversy over the future status of London in Europe’s customs union has taken centrestage in recent months, deepening divisions among the ruling Conservatives over a hard or soft exit. Fuelling the rift was a leaked Whitehall secret analysis in January of the economic fallout of leaving the EU. It forecast a meagre 0.2-0.4% rise in GDP from a U.K. trade deal with countries outside the bloc, including the U.S. and China. Meanwhile, Jeremy Corbyn, the opposition Labour leader, has signalled a shift in his party’s stance and called for remaining in the customs union as the only realistic guarantee of duty-free access to the EU after Brexit. The veteran eurosceptic’s current disposition to forge strong links with the single market is significant. Staying in a customs union will limit the loss of trade with EU. It would also reduce the risk of a hard border between Britain and the Republic of Ireland, a prospect that Dublin sees as a potential danger to the integrity of the 1998 Good Friday Accord with Northern Ireland. However, sharing the same tariff rates within the EU would severely limit Britain’s room for manoeuvre in negotiating trade agreements with non-EU nations. Whereas a customs deal is necessarily restricted to commerce in goods, bilateral trade pacts typically include several menu items besides goods, such as services and investment. The U.K.’s retention of the EU customs union would therefore subject London’s trade deals with third countries to the tariff terms they may have already settled with the EU. Such an eventuality would expose the bluster behind the Brexiteers’ rhetoric of ‘taking back control’ of the country’s economic and political sovereignty. In the event of a defeat in the House of Lords, Ms. May would have the option of going to the Commons, where she has a slender majority. But there is no denying the fluid state of the negotiations over Britain’s withdrawal, or Brussels’ increasingly strong position when it comes to dictating the terms of the departure. The hope must be that all the parties concerned will make the best of a rather bad situation.