Theresa May has suffered a major Parliamentary defeat over Brexit after the House of Lords voted to keep open the option of staying in the EU Customs Union.

Peers voted by 348 to 225 for a cross-party amendment to the EU (Withdrawal) Bill to require the Government to say how its negotiations with Brussels will continue the crucial tariff-free trade arrangement with the European Union.

The huge size of the majority – 123 votes – underlined the strength of the alliance of Labour, Liberal Democrat, crossbencher and Tory rebel peers and spells trouble for the PM as a raft of other amendments are due in coming weeks.

Brexit minister Lord Callanan warned that even if the amendment was passed, he would not give “false hope” that there would be any concessions as a result.

Hours later, peers inflicted a second defeat on the Government after they approved an amendment which aims to protect people’s rights post-Brexit, by 314 votes to 217, a majority of 97.

One Government source told HuffPost UK: “The Lords is a Remainer holdout. Nothing has changed.”

A DExEU spokesperson said: “We are disappointed that Parliament has voted for this amendment.  

“The fundamental purpose of this Bill is to prepare our statute book for exit day, it is not about the terms of our exit.

 “This amendment does not commit the UK to remaining in a Customs Union with the EU, it requires us to make a statement in Parliament explaining the steps we’ve taken.

“Our policy on this subject is very clear. We are leaving the Customs Union and will establish a new and ambitious customs arrangement with the EU while forging new trade relationships with our partners around the world.”

But the House of Lords decision now puts pressure on Tory Remainer MPs – who have the numbers to overturn May’s wafer-thin majority – when the bill returns to the Commons next month.

The Lords vote came exactly a year after Theresa May called her snap general election last year – when she warned peers not to sabotage her Brexit plans.

Former mandarin Lord Kerr, who led the amendment, stressed that his proposal would simply require ministers to not rule out the option of staying in the customs union.

The exact wording of his amendment was that the government should make a statement to Parliament about steps taken to negotiate “an arrangement which enables the United Kingdom to continue participating in a customs union with the European Union”.

Shadow Brexit Secretary Keir Starmer said: “The passing of this cross-party amendment is an important step forward. 

“Labour has long championed the benefits of a customs union as the only viable way to protect jobs, support manufacturing and help avoid a hard border in Northern Ireland after we leave the EU.

“Theresa May must now listen to the growing chorus of voices who are urging her to drop her redline on a customs union and rethink her approach.”

Labour’s Baroness Hayter, who joined former Tory Cabinet minister Lord Patten and Lord Kerr in tabling the amendment, had pointed out in the debate that Brexit Secretary David Davis had made Customs Union membership a key element of the general election last year.

“Come election night 2017, soon after 2am, David Davis admitted on air that ‘the government might have lost their mandate to exit .. the customs union. That’s what we put in front of the people. We’ll see by tomorrow whether they’ve accepted that or not’.

“They did not. There was no majority for that Red Line. No mandate for a hard Brexit.”

A string of heavyweight Tories, including former Chancellors Lord Lamont and Lawson, argued that the amendment would undermine the Government’s negotiating stance.

But Patten ridiculed both Boris Johnson and Liam Fox for their various stances on Brexit.

He mocked claims by the International Trade Secretary that a free trade deal with the EU would be “one of the easiest in human history” and suggested the current approach being taken by the government to securing agreements was “absurd”. 

In a sideswipe at the Foreign Secretary, Patten said: “I don’t think repeating the Road to Mandalay whenever one’s travelling, I don’t think that is going to make a spectacular difference to our trading opportunities. I don’t think we will do better than we are doing within the customs union.” 

But Richard Tice, Co-Chair of Leave Means Leave, said: “It is disappointing, but unsurprising, that unelected members of the House of Lords have continued in their quest to delay, dilute and disrupt Brexit, with damaging measures that affect the poorest in the UK most of all.”

Some 25 Tory peers joined the rebellion to vote against their party whip, including former Cabinet ministers David Willetts, James Arbuthnot, John Gummer, Michael Heseltine, Andrew Lansley and Chris Patten.

The full list is here:

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