Tory rebels withdraw amendment to boycott Irish backstop

Tory rebel Steve Baker withdrew a parliamentary amendment that would have made the European Union’s backstop proposal illegal, according to reports on Monday.

Baker said earlier on Monday he had lodged the amendment in an attempt to boycott the EU's proposal on Wednesday and had already received support from the Democratic Unionist Party of Northern Ireland and from approximately 40 Tory MPs, The Telegraph reported.

The Tory MP decided to withdraw the amendment because of lack of support from the Labour party, said The Times reporter Francis Elliot on Twitter.

Theresa May agreed to the EU’s proposal back in December in order to avoid a hard border in Ireland. The proposal would keep Northern Ireland aligned with the bloc’s customs union and separate it from the rest of Britain for a period of time until an alternative option is implemented.

The DUP who have strongly opposed any option that would create a border between Northern Ireland and the rest of Britain confirmed their support for Brexiter Steve Baker earlier on Monday.

This could have caused further problems for the government since it is currently supported by the 10 DUP lawmakers that grant May a slim majority in parliament.

May’s spokesman said the government would look at the amendments “in the usual way”.

“It’s worth pointing out the legislation’s purpose: it is necessary to provide the Northern Ireland civil service with the certainty and clarity they need to continue to deliver public services,” 10 Downing Street told reporters.

The amendment caused sterling to fall 0.5% on Monday as fears that the rebels could cause the PM to face a serious challenge to her leadership.

"(The DUP report) is just reinforcing the negative sentiment towards the pound. On the weekend we saw increasing concern over political instability in the UK and the threat of another leadership challenge back on the table," said Lee Hardman, FX strategist at MUFG.