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Jeremy Corbyn’s party said they hoped plans not to back the European Union (Withdrawl) Bill at a second reading would divide Tory ministers at a vote next week.
However, Tories accused the opposition of recklessness said failure to pass the bill through Parliament would risk a chaos when Britain quit the block in 2019.
The row erupted as Brexit Secretary David Davis spoke to the House of Commons about the progress of critical negotiations in Brussels.
Mr Davis said crucial talks with EU chief negotiator Michael Barnier has been “tough” but insisted he had made “significant steps forward” on issues including citizens’ rights and the Irish border.
He added that although the UK was ready to step up the tempo of talks it looked likely a row of the cost of leaving the EU would continue until the end of the two-year long negotiations.
Prominent Tory backbencher Jacob Rees-Mogg told the Commons that the EU’s proposal for a financial settlement estimated at £50-£80 billion amounted to a “demand for money with menaces” which he branded “ridiculous”.
But Mr Davis was careful to avoid repeating International Trade Secretary Liam Fox’s accusation of EU “blackmail”, describing it instead as “a pressure tactic to make us pay”.
The Brexit Secretary was jeered by Labour MPs as he told the Commons: “Nobody has ever pretended this would be simple or easy.
“We’ve always said this negotiation would be tough, complex and at times confrontational. So it has proved.”
Shadow Brexit secretary Sir Keir Starmer reminded him that Dr Fox had said striking an agreement with the EU would be “one of the easiest deals in human history”, while Mr Davis himself predicted that free trade deals covering an area massively greater than the EU would be in place by the time of withdrawal.
Sir Keir called on the Government to drop some of Mrs May’s “deeply flawed red lines” in the negotiations, including her insistence that Britain will no longer be subject to the European Court of Justice after Brexit.
Labour’s announcement that it will oppose the EU (Withdrawal) Bill at the first stage of its passage through the Commons came after a meeting of the shadow cabinet on Tuesday morning.
A party spokesman said: “Labour fully respects the democratic decision to leave the European Union, voted to trigger Article 50 and backs a jobs-first Brexit with full tariff-free access to the European single market.
“But as democrats we cannot vote for a bill that unamended would let Government ministers grab powers from Parliament to slash people’s rights at work and reduce protection for consumers and the environment.
“Parliament has already voted to leave the European Union. But the Government’s EU Withdrawal Bill would allow Conservative ministers to set vital terms on a whim, including of Britain’s exit payment, without democratic scrutiny.”
The spokesman added: “The slogan of the Leave campaign was about people taking back control and restoring powers to Parliament.
“This power-grab bill would do the opposite. It would allow the Government to seize control from the Parliament that the British people have just elected.”
The bill is facing a backlash from some senior Tories, Labour and the Liberal Democrats as it contains so-called “Henry VIII powers” which would allow changes to be made to British law without full parliamentary scrutiny.
But the Government has insisted the powers will be time-limited and used only to make technical amendments, while significant changes to policy in areas like immigration, customs and trade will be contained in primary legislation subject to parliamentary debate and votes.
Responding to Labour’s announcement, Tory MP Luke Hall said: “This reckless threat to vote against the Bill, without presenting any alternative approach, risks defying the result of the referendum, and risks the most chaotic of Brexit scenarios, where our legal systems and institutions cannot function from day one of our exit.”
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