Peers have inflicted a 15th defeat on the government’s key Brexit bill, underlining the acute political challenge Theresa May faces in seeking a deal that both parliament and her warring ministers can live with.



The latest amendment, aimed at bolstering environmental protection after Brexit, was carried by 294 to 244 votes on Wednesday.

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Peers argued that enforcement measures proposed in a consultation document published last week were inadequate and that the environment had been subordinated to housing and economic growth.

With her cabinet still deadlocked over customs arrangements, the prime minister must now decide when to bring the legislation back to the House of Commons and seek to undo the changes made by peers.

Martin Callanan, the Conservative leader in the Lords, said: “During the bill’s journey through the House of Lords, some changes have been made that conflict with its purpose or are designed to frustrate the entire exit process, and so we are considering the implications of those decisions.”

The backbench pro-Brexit European Research Group, chaired by Jacob Rees-Mogg, wants to see the votes brought forward as soon as possible to scotch the idea that there is a majority against hard Brexit among MPs.

They point to a pair of recent Commons victories, over the release of Windrush documents and a second Leveson-style inquiry, as evidence that the government’s majority is more secure than moderate backbenchers claim.

But some of the Lords amendments, including those on a customs union and on the meaningful vote, received significant Conservative support on the Lords, which could strengthen the convictions of waverers in the Commons.

Angela Smith, Labour’s leader in the Lords, said: “The prime minister will have been carefully watching our debates and votes on this bill. It now returns to the Commons in better shape, with both government and cross-party amendments that provide MPs with an opportunity to consider these important issues.”

Meanwhile, evidence from Northern Ireland secretary Karen Bradley to a select committee in Westminster illustrated the depth of May’s other constitutional headache – over how to protect the integrity of the Good Friday agreement by ensuring there is no hard border.

Bradley told MPs there must be “no new physical infrastructure at the border”, including numberplate recognition cameras. But she appeared to choose her words carefully, hinting that there could be infrastructure away from the border.

“We have to be very careful when we look at the arrangements and the suggestions that would be in place as to how we would police it; how we would manage the infrastructure needed, should infrastructure be needed at some point, at some place, in order to achieve the aims of the customs arrangements,” she told MPs.

Bradley, a close ally of Theresa May, made clear that she favours the new customs partnership, in which the UK would collect taxes on behalf of the EU, rather than the “max fac” approach preferred by Brexiters, which they insist could be managed with a minimum of new infrastructure and could be set back from the border.

But she insisted she had an open mind. Bradley is part of a cabinet working group, examining max fac to see if it can be adapted to deal with the border question. A separate group is looking at the customs partnership.

The government has promised to set out its approach to the negotiations in a white paper before June’s EU summit.

There are reports that max fac, where the UK and EU would work cooperatively to ensure friction-free trade, is gaining ground at Westminster and among EU negotiators. “There are signs the prime minister is leaning into max fac,” said one person with knowledge of the negotiations.

Facebook Twitter Pinterest The European Research Group, chaired by Jacob Rees-Mogg, wants to see the votes on the bill brought forward as soon as possible. Photograph: Matt Cardy/Getty Images

The Guardian understands that Brussels now views it as more practicable than the customs partnership – though it still falls far short of resolving the Irish border issue.

Other cabinet sources insisted that nothing had changed, and that the two sides of the customs row remained “entrenched”. Neither is there much hope of a civil servants drawing up a compromise measure. “I don’t think there’s a lot more that the bureaucracy can do; ultimately, someone’s got to decide,” said one Whitehall source.

One suggestion is that if there were still outstanding issues to be resolved, there could be an extension to the transition period. It is currently set to run until December 2020.

Downing Street sources denied late on Wednesday that the Brexit inner cabinet had agreed a new proposal for the so-called “backstop” that could involve remaining in the customs union beyond 2021. The Daily Telegraph reported that even Brexiters had reluctantly signed up to a proposal that would keep Britain aligned to the customs union after the transition period, if a deal could not be agreed that would avoid a hard border.

The prime minister has rejected Brussels’ plan for a backstop, and Britain is working on its own alternative. But some cabinet Brexiters are prepared to accept customs union membership as a backstop in the hope that it will make Brussels more likely to negotiate constructively.

However, any extension to the transition period would come with a price tag, since it would take the transitional relationship into a new EU accounting period. The UK would be required to pay a fee, as Norway does, for access to the single market.

On Wednesday night, Labour lost a bid to use parliamentary procedures to force the government to publish cabinet papers about the customs row. The shadow Brexit team, led by Keir Starmer, had sought to make the government publish the documents – but they were defeated by 301 votes to 269, a majority of 32.

