LONDON • British Prime Minister Theresa May's minority administration faced its biggest test yet yesterday, with Parliament set to vote on her legislative programme.
The opposition Labour Party was seeking to introduce elements of its manifesto via amendments, including one demanding Britain tries in Brexit talks to keep the "exact same benefits" of the European Union's single market and Customs union.
Labour leader Jeremy Corbyn has complained of a "race-to-the-bottom Brexit".
The vote on amendments was due to take place yesterday afternoon, with a vote on the full programme scheduled for later in the day.
Mrs May's government cleared its first obstacle on Wednesday when Parliament narrowly rejected Labour's push to end years of public service cuts. Labour introduced the amendment on Wednesday to the Queen's Speech - the government's legislative agenda - calling for an end to the pay cap and cuts to the police and fire service budgets.
The proposed amendment was defeated by 323 votes to 309, reflecting the new landscape in Parliament where the Conservatives now need the backing of Northern Ireland's ultra- conservative Democratic Unionist Party (DUP), after losing their majority in this month's snap election.
The Conservatives had expected to increase their majority in the election, but Mr Corbyn energised voters with an offer of increased public sector investment.
The proposed amendment was defeated by 323 votes to 309, reflecting the new landscape in Parliament where the Conservatives now need the backing of Northern Ireland's ultra-conservative DUP party, after losing their majority in this month's snap election.
With 317 of the 650 Parliament seats, the Conservatives now need support from DUP's 10 MPs. Mrs May's deal with DUP has raised questions about austerity, after the government promised £1 billion (S$1.79 billion) in new funding for the province in order to secure DUP support.
Mr Corbyn claimed in a Commons debate with Mrs May ahead of the vote that austerity played a part in the blaze at London's Grenfell Tower earlier this month, in which 79 people are presumed dead.
Before the vote, sources close to Mrs May signalled an easing of austerity could soon be on the cards. "We understand people are weary after years of hard work to rebuild the economy," a senior source in her Downing Street office said. "We're working through and looking at the recommendations from the pay review bodies that are coming in."
But Downing Street later sought to downplay those comments, insisting instead that its policy had not changed. The Prime Minister on Wednesday also sought to cover over cracks in her Cabinet by saying she won't accept an "unlimited" transitional phase after Brexit.
The embattled premier might have found some rare solace in signals from Brussels on Wednesday. According to three officials, the EU is willing to give ground on its demand that its judges protect the future rights of EU citizens in Britain.
That would potentially eliminate a major obstacle to progress in the Brexit negotiations and be a significant concession to Britain. Such a pull-back would put the onus back on Britain to increase the level of protection it is offering, which the EU says is below existing rights.
The British have signalled a willingness to make a deal too. Brexit Secretary David Davis said on Sunday that Britain would consider working with the EU to establish a new arbitration body featuring representatives from both sides.
This is one of the alternatives that the EU would be willing to consider, one of the officials said. Still, in a document obtained by Bloomberg on Wednesday, the European Commission said Mrs May's proposal contained a "general lack of clarity" and left "many issues still to be clarified".
BLOOMBERG, AGENCE FRANCE-PRESSE