June 6, 2018 / 12:15 PM / in 4 months

Pressuring May, UK's Labour tries to force new single market deal

LONDON (Reuters) - The opposition Labour Party has thrown down the gauntlet to Prime Minister Theresa May on Brexit, urging lawmakers to defeat her in parliament by backing a proposal for Britain to stay in the EU’s single market after leaving the bloc.

Ten months before Britain is due to leave the European Union, May is struggling to unite her party and government over a Brexit strategy. She also faces a parliament where some lawmakers want to force her to go back on promises to leave the bloc’s single market and customs union.

By tabling a new amendment to May’s Brexit blueprint, the EU withdrawal bill, Labour puts the single market back at the center of a debate that could shape Britain’s trading relationships for years to come.

It also challenges many of its own lawmakers who want Britain to have an even stronger relationship with the EU and stay in its European Economic Area.

The move further muddies the water over a vote next week on the EU withdrawal bill, which May needs to pass to sever ties with the bloc and “copy and paste” its laws into British legislation so the country can function after March next year.

It first hangs on whether the amendment will even be accepted and debated in parliament on June 12. Then it comes down to whether it can get the numbers to defeat the government.

The amendment calls on the government to negotiate full access to the EU’s single market, to keep common minimum standards, rights and protections, to share joint institutions and regulations, and ensure there are no new impediments to trade, while retaining control over immigration.

That combination could potentially break with one of the EU’s “four freedoms” — movement of workers, goods, capital and services — that underpin access to the single market.

“Labour will only accept a Brexit deal that delivers the benefits of the single market and protects jobs and living standards,” Keir Starmer, Labour’s Brexit policy chief, said on Tuesday.

FILE PHOTO: A Britain's and some European flags are hung outside the EU Commission headquarters in Brussels, Belgium December 4, 2017. REUTERS/Yves Herman/File photo

The move ignites the latest battle in a long series of conflicts waged in both parties, the two houses of parliament and across a deeply divided country since it voted in a 2016 referendum to leave the bloc.

A struggle in May’s team of ministers over future customs arrangements with the EU has all but stalled Brexit negotiations, and there is little time left. The EU is expecting her to have made progress by a summit later this month and both sides want to reach a deal by October.

On Wednesday in parliament, she again defended her government’s deliberations, saying her ministers would publish a policy document on Britain’s future relationship with the EU. But she did not say when.

“RUNNING OUT OF TIME”

The Conservative Party attacked Labour’s amendment, saying it “shattered their promise to respect the referendum result”.

It also has caused ripples in Labour, where some lawmakers had lobbied for the party to support an amendment to keep Britain in the EEA, retaining full access to the single market in return for making payments and accepting the four freedoms.

Labour lawmaker Chuka Umunna accused the leadership of trying to wreck that amendment and preventing what would be a painful government defeat after some Conservative lawmakers had suggested they could vote for the EEA on June 12.

But Seema Malhotra, another Labour lawmaker, said the move could unite the party. Britain’s next election is not due until 2022.

“We are running out of time on how we move forward as a country after Brexit with a government too divided make a decision,” Malhotra told Reuters. “Parliament is now taking a lead in setting the direction of travel that is right for the economy.”

Starmer told the BBC he believed the EU would be open to negotiating a new deal if Britain dropped its red lines. The bloc has said countries must accept its four freedoms that must be maintained for access to the single market.

He called on the party to unite around the new amendment, saying the EEA model would not work as it did not include access to the EU’s customs union.

Additional reporting by Michael Holden; Editing by Andrew Heavens and Richard Balmforth

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