Theresa May’s Brexit plan is “not dead”, a senior minister has insisted despite concessions made to Tory MPs to avoid a Commons defeat on trade.
The government scraped home by three votes on two occasions after agreeing to Brexiteers’ demands to change the wording of the Customs Bill.
Liam Fox said it did not change policy as the amendments had been “cut and pasted” from the PM’s Chequers plan.
He also warned pro-European Tories against “refighting the referendum”.
The international trade secretary told the BBC that feelings were running high but calls from some Tories to stay in a customs union, which will be voted on later, would send completely the wrong message to the EU.
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The UK is due to leave the EU on 29 March 2019 but has yet to agree how its final relationship with the bloc will work.
The government, which does not have a Commons majority, has been under pressure from MPs on both sides of the Brexit debate.
The government twice survived by just three votes on Monday after a backlash from pro-EU Tories who accused the prime minister of “caving in” to the party’s Eurosceptic MPs.
Fresh test ahead in Commons
Ministers accepted a series of demands from Brexiteers who are unhappy at the PM’s Chequers blueprint for future relations with the EU, believing it keeps the UK too closely tied to the bloc.
But this angered MPs from the party’s pro-EU wing who refused to back the new amendments, saying they would undermine the UK’s recently-announced negotiating position.
By 305 votes to 302 – with 14 Tories rebelling – MPs backed an amendment that prevents the UK from collecting taxes on behalf of the EU, unless the rest of the EU does the same for the UK.
Applying EU tariffs to products destined for the EU is part of Mrs May’s plan to avoid friction at UK borders after Brexit.
Another amendment, to ensure the UK is out of the EU’s VAT regime, was backed by 303 to 300, with a Tory rebellion of 11. Three Labour MPs voted with the government. Current and past Lib Dem leaders Sir Vince Cable and Tim Farron – who want to stop Brexit – did not vote.
MPs will carry on debating Brexit on Tuesday when the Trade Bill comes to the Commons.
It gives the government the power to build new trade relationships around the world after the UK leaves the EU, and MPs who support staying in the EU’s customs union are seeking to change its wording.
‘Strong feelings’ on both sides
Tory MP and Remainer Heidi Allen said she wished the prime minister had “faced down the amendments.”
She told BBC Radio 4’s Today programme: “What was agreed at Chequers wasn’t perfect to us, wasn’t perfect to Leavers either, but I think the prime minister had worked exceptionally hard to find a decent first pitch to put to the EU and move forward from that.
“We were all set [on the Remain side] to drop all our amendments and back it, then suddenly we had these rather extreme last minute manoeuvres, which seem to us to deviate the prime minister from her plan and we weren’t prepared to do that.”
But Mr Fox said the amendments “did not differ very much” from the government’s agreed position. Asked if the Chequers plan was dead, he told BBC Radio 4’s Today “I don’t think so”.
“The wording in the white paper was that the UK and the EU should together agree a mechanism for the remittance of relevant tariff revenue,” he said.
“As far as I could see the amendment looked like a bit of a cut and paste from the white paper.”
He said the government could “not please everybody” and there had to be compromises but Brexit had been backed by 17.4 million people in a referendum and legislation implementing that decision approved by MPs.
“I do not understand why people thinks this lacks democratic legitimacy. It is very clear where it comes from.”
Little room for manoeuvre
BBC political editor Laura Kuenssberg
It looks a mess because it is a mess. It’s getting harder and harder for the prime minister to get things through Parliament – and while calls for a second referendum are widely rejected, that sentiment could change if this kind of gridlock continues.
The PM has spent the last two years trying to compromise. She has a divided party and no majority. There are no easy choices.
But the divisions in the Tory party are daily reducing her room for manoeuvre. In a debate about principle, the problem for some is that compromise is a dirty word.
The Conservative rebels on Monday were the long-time pro-EU MP Ken Clarke, Heidi Allen, Guto Bebb, Richard Benyon, Jonathan Djanogly, Dominic Grieve, Stephen Hammond, Philip Lee, Nicky Morgan, Robert Neill, Mark Pawsey, Antoinette Sandbach, Anna Soubry and Sarah Wollaston.
The three Labour MPs who rebelled against their party whip by voting with the government were Frank Field, Kate Hoey and Graham Stringer – all of whom are pro-Brexit.
Former Labour MP Kelvin Hopkins who now sits as an independent also supported the government on one of the amendments.
How has the EU reacted?
BBC Europe editor, Katya Adler said the one priority the EU has is making sure it gets a deal, rather than a “cliff edge” Brexit.
She told Today: “They are following all the ins and outs, and all the turbulence, in UK politics extremely carefully.
“[But] they are wondering if the prime minister – or anyone who could or might take over from her – would even have the political strength to get a deal agreed here in Brussels, then passed by parliament back home.
“All my EU sources say they want to engage constructively with the whitepaper and avoid giving the impression that it is dead on arrival. But importantly, as everyone knows, time for negotiation is running short. They want to complete the withdrawal agreement.”
Brexit: Chequers plan not dead, insists Liam Fox}