Conservatives look for Brexit compromise after local poll losses

By David Milliken

LONDON (Reuters) - Britain's governing Conservatives need to be open to compromise with the opposition Labour Party in order to deliver Brexit following heavy losses in Thursday's local elections, senior ministers said on Saturday.

Prime Minister Theresa May's Conservatives lost 1,332 seats on English local councils that were up for re-election and Labour, which would typically aim to gain hundreds of seats in a mid-term vote, instead lost 81.

Many voters expressed frustration at May's failure to have taken Britain out of the European Union, almost three years after the country decided to leave in a referendum.

“If local elections down south tell us anything, they remind us that referendum verdicts must be honoured,” the environment minister, Michael Gove, told a conference of Scottish Conservatives in Aberdeen.

Health minister Matt Hancock gave a similar message in a BBC radio interview. “I think we need to be in the mood for compromise,” he said.

Labour has demanded guarantees on workers' rights and a permanent customs union with the EU as a condition for supporting an EU withdrawal deal.

May's government has opposed a customs union, preferring a looser arrangement that would allow Britain to strike its own trade deals with countries outside the EU.

Hancock suggested there could be greater willingness to compromise following the election losses.

“(Thursday's vote) wasn't about 'deliver this particular form of Brexit!' There was no door that I knocked on and the person said: 'I would like a slight change to paragraph 5 of this agreement in this particular way'.”

Foreign minister Jeremy Hunt said he saw a “glimmer of hope” that a compromise was possible, but said Labour's customs plans could not be a long-term solution for Britain.

CUSTOMS UNION

May said on Friday that the message for both the Conservatives and Labour from Thursday's elections was that voters wanted parliament to deliver Brexit.

In a rare agreement, Labour leader Jeremy Corbyn said there was now a “huge impetus” on every lawmaker to get a Brexit deal done.

Complicating the picture, however, the main beneficiaries of the swing against the two main parties were the pro-EU Liberal Democrats, who campaigned on a demand for a new referendum, aiming to reverse Brexit.

Buzzfeed News reported on Saturday that May was optimistic she could reach a deal with Labour soon, and that behind closed doors the government had already compromised on a customs union.

“In the last week government ministers and officials presented Labour with a new offer on a customs arrangement that would effectively see the UK remain in the key aspects of a customs union with the EU,” sources familiar with the talks told BuzzFeed News.

The website said one source had told it “the offer would be tantamount to the government accepting in full Labour's demands”.

The political editor of the Spectator magazine, which has close links to the Conservatives, said in a column for the Sun newspaper that there had been an agreement to an initial “comprehensive customs arrangement” very like a customs union.

Labour and the Conservatives would then leave open whether this would lead in future to Labour's preferred customs union, with EU consultation rights, or the looser arrangement preferred by the Conservatives.

It is unclear if the EU would approve a temporary customs deal, as border controls might later be needed between Ireland and Northern Ireland if the deal broke down.

Buzzfeed's sources did not know how soon a deal would be reached, and thought it possible that Corbyn would avoid striking a deal until after European elections due on May 23 to maximise damage to the Conservatives.

And even if May and Corbyn agree, there is no certainty they could convince enough lawmakers in their parties to ensure a majority for the deal.

Many Conservative eurosceptics fear the newly launched Brexit Party of veteran anti-EU campaigner Nigel Farage will cost them support in the European elections.

That has encouraged some to call for the government to take a tougher stance on Brexit and demand a clean split with the EU.