Fresh pressure on UK Government to keep Britain in customs union with EU

The Government is facing renewed pressure at Westminster to keep Britain in a customs union with the EU post-Brexit.

Labour has indicated it will seek to change flagship legislation during its passage through the House of Lords.

The Trade Bill has already been through the House of Commons where Theresa May narrowly saw off a rebel Tory move that could have forced her to try to keep Britain in a customs union with the EU.

The opposition has branded it the "greatest missed opportunity" in the proposed legislation, arguing that a "trading bloc is inherently more powerful than an isolated nation state".

The criticism came during second reading in the Lords of the Bill, which will make some of the changes needed to enable the UK to implement an independent trade policy after the break with Brussels.

Labour frontbencher Lord Grantchester said: "One of the very myths peddled by this Government is that the UK is better off outside a customs union with the EU.

"A customs union could allow for frictionless trade with the EU and offers the best possible basis for dealing successfully with the Irish border issue.

"It could also pave the way for access to over 50 trade agreements with third countries."

He added: "This Bill is a missed opportunity to prepare the UK for a new chapter in our trading history."

Labour former Cabinet minister Lord Hain argued a new comprehensive customs union with the EU was the best way to protect jobs and the economy.

"I find it mind-boggling that with the clock fast running right down we still have absolutely no idea after Brexit how we will be trading with our biggest trading partner, Europe, or any other country outside," Lord Hain said.

Opening the Bill's second reading debate, Trade Minister Baroness Fairhead underlined its importance, telling peers: "Before we sign any new trade agreement we need to maintain the effects of our existing ones."

She said: "We are forging a new trade policy to make the most of the opportunities of Brexit but we need to get the practicalities right first."

She added that the Bill put in place "a firm foundation for our future trade policy for the years to come".

Tory former trade secretary Lord Lilley hailed the Bill as "useful, workmanlike and necessary" but cautioned against exaggerating the importance of trade deals, insisting: "What drives trade is producing goods and services other people want to buy."

Independent crossbencher Lord Butler of Brockwell, who headed the civil service for a decade, backed another referendum on the final deal.

He said: "I do not believe it would be right or responsible for the British people to go over the cliff without their being asked to make an informed choice when the terms of our future relationship with the EU are available."

But Tory former minister Lord Hamilton of Epsom criticised the "serried ranks" in the upper chamber "who think the country made a very great mistake voting to leave the EU" and were "not really reconciled" to the outcome of the 2016 referendum.

Labour former Cabinet minister and prominent Remainer Lord Adonis said: "Ireland is the Achilles heel of Brexit, because Brexit simply cannot be squared with the prosperity and flourishing of Ireland because of the impediments it will impose on trade within Ireland and between Ireland and Great Britain."