May feels more heat over EU's customs union

By Elizabeth Piper

LONDON (Reuters) - British lawmakers stepped up pressure on Prime Minister Theresa May over her Brexit strategy on Thursday, criticising her refusal to pursue a customs union with the European Union.

But many prominent anti-EU campaigners did not show up to a parliamentary debate on urging the government to press for the negotiation of "an effective customs union" with the bloc after Brexit, after May ruled out any change in her stance.

Their absence meant an expected showdown was little more than a painful reminder for May that she is far from winning the argument on Brexit even in her Conservative Party, and could be defeated in parliament later this year.

The House of Commons approved the motion on a customs union verbally without a vote in a procedure that does not require the government to take any action.

The, or a, customs union is one of the main flashpoints in the debate over Britain's impending exit from the EU and Brexit campaigners are sensitive to any suggestion that Britain might stay in such an association with the bloc.

That was brought home when interior minister Amber Rudd was forced to clarify her remarks at a lunch with journalists that had seemed to suggest the government was still working out its policy on the customs union.

She later again said that the government's position was to leave the customs union, which sets external tariffs for goods imported into the bloc, so that Britain can independently negotiate trade deals with other countries.

Brexit supporters say that remaining in any EU grouping will reduce Britain to a "vassal state".

"I think there is a possibility of a consensus around the customs union," Yvette Cooper, a member of the opposition Labour Party, said, airing a view that there were enough lawmakers to vote against the government later in the year.

"It's no good pretending to be in a parallel universe in which all of things we might want to be true just simply aren't."

She was joined by several Conservative lawmakers, who have long said that May's insistence that Britain will leave the EU's single market and customs union could isolate and harm the world's fifth largest economy.

Pro-EU lawmakers have been emboldened after Britain's upper house of parliament, the House of Lords, also challenged her adherence to what some of her critics say is an unnecessary red line - one which may mean the return of a hard border with EU member Ireland.

The EU has added its weight to the argument, with diplomats and officials saying they would offer Britain a closer relationship if it stays in the customs union, which would help break the latest stalemate in talks.

But May and her ministers have stuck to their position, forced to repeat their mantra almost daily that Britain will be "leaving the customs union and will be free to strike our own trade deals around the world".

CUSTOMS OPTIONS

May is all but trapped by the deep divisions that have widened since Britain voted in June 2016 to leave the EU.

Since losing her Conservatives' majority in parliament in an ill-judged election last year, the prime minister is dependent on a small Northern Irish party which opposes a backstop agreement with the EU that would see the province become more aligned with the bloc than with mainland Britain.

The Democratic Unionist Party's Nigel Dodds told the Conservativehome website on Wednesday that was a "red line".

"The government's well aware that when it comes to Brexit and the United Kingdom, the United Kingdom has to leave the European Union and all its institutions together," he said.

Vocal pro-Brexit campaigners have also held her to her position on the customs union, leaping to protest at any hint she could seek a compromise on ties to prevent a return of a hard border that might reignite sectarian violence.

May is before anything a unionist, her aides say, and will not want to be the prime minister that splits the United Kingdom, with one suggesting she had looked at some form of customs deal along the lines of a union.

But after Rudd's comments, May's spokesman again said Britain had no plan to stay in the customs union or join a customs union after Brexit, and would narrow its position to a single customs proposal in the EU negotiations.

"The government is absolutely clear and without ambiguity that we will be leaving the customs union and won't be joining a customs union," he told reporters.

"There is a discussion around which of the two customs options...the government opts for but are we leaving the customs union? The answer is categorically yes."

(additional reporting by Andrew MacAskill and David Milliken; Editing by Mark Heinrich)