Unelected peers in the upper house voted by 354 to 235 to support a rebel amendment on the role that parliament should play if the government fails to secure a deal with the European Union before Britain leaves the bloc in March 2019.
“I want to ensure that parliament does have a meaningful vote and I don’t want to see that left to chance,” said Lord Hailsham, the member of May’s Conservative Party who proposed the motion.
The amendment to the EU (Withdrawal) Bill was drawn up in consultation with pro-European MPs in the lower House of Commons, who will have a chance to vote on it themselves tomorrow.
They had threatened to rebel on the same issue when they debated the bill last week, but held off following personal assurances from May that she would heed their concerns.
However, her compromise amendment fell short of their expectations, and peers agreed to back an alternative so the MPs could vote again when the bill returns to them, in a process known as “ping-pong”.
May earlier warned that any attempt by parliament to take control of the Brexit negotiations would weaken her hand.
“Of course we have been listening to concerns about the role of parliament,” she told reporters. “But we need to make sure that parliament can’t tie the government’s hands in negotiation and can’t overturn the will of the British people.”
Despite the stuttering progress in the talks with Brussels, both sides still hope to reach a deal in October.
The government has promised lawmakers a vote on the final deal, but the issue at stake is what happens if they reject it.
Pro-Europeans want to ensure there is some way of holding the government to account in what would be a crisis situation.
The EU (Withdrawal) Bill would formally end Britain’s membership of the bloc and transfer more than 40 years of European law on to the British statute books.
May is on a tightrope as her Conservative minority government relies on the backing of 10 MPs from Northern Ireland’s Democratic Unionist Party for a slim majority in the 650-seat elected Commons chamber.
Dominic Grieve, the former attorney general who heads up the pro-European faction, told BBC television that a future vote on a Brexit deal could see May tumble.
“We could collapse the government, and I assure you I wake up at 2am in a cold sweat thinking about the problems that we have put on our shoulders,” he said.
An added risk for the rebels is that if May does fall, it could open the door for an arch-Brexiteer to take over.
May risked stirring the pot further yesterday by announcing new money for the state-funded National Health Service (NHS) based on a “Brexit dividend”.
She said part of the £20bn ($27bn, €23bn) injection would be funded by “the money we no longer spend on our annual membership subscription to the European Union” (see accompanying report).
PM tells taxpayers to expect to pay more to fund the NHS
By Peter Walker and Heather Stewart/Guardian News & Media
Theresa May has reiterated her much-questioned belief that a new funding deal for the National Health Service (NHS) can be financed in part using money saved as a result of Brexit, but said that taxpayers should also expect to contribute more.
In a much-trailed speech about a new long-term funding deal for the health service, the prime minister confirmed a planned real-terms annual rise of 3.4% until 2023-24, giving NHS England £20.5bn more a year by the end of the period.
In a wide-ranging address at the Royal Free hospital in north London, she also promised to contribute £1.25bn more a year to NHS pensions costs, and said that careers in the health service should be made more flexible and family-friendly.
However, she remained vague on where the new money – £394mn more a week in real terms by the end of the settlement – would come from, beyond mentioning taxes and repeating her confidence in a “Brexit dividend”.
In the run-up to the speech May faced criticism over the lack of clarity, plus the reliance on a Brexit boost – something both the Office for Budget Responsibility and the Institute for Fiscal Studies thinktank have said will not materialise.
Answering questions afterwards, May said that bigger tax revenues would be part of the answer.
“As a country taxpayers will need to contribute a bit more,” she said. “But we will do that in a fair and balanced way. And we want to listen to people about how we do that, and the chancellor will bring forward the full set of proposals before the spending review.”
Asked about the scepticism over the Brexit dividend claim – official forecasts say that departing the EU will cost the public purse about £15bn a year, while much of the EU contribution has already been allocated for the next few years – May stood by the idea.
“It’s very simple: we’re not going to be sending the vast amount of money every year to the EU that we spend at the moment as a member of the European Union,” she said. “That money will be coming back, and we will be spending it on our priorities. And NHS is our No 1 priority.
“Of course, as we’ve agreed in the financial settlement last December, there will be those payments that we’ll be making over a period of time as part of our withdrawal from the EU, but there will still be more money coming back from the EU.”
May used her speech to call the NHS the “crowning achievement” of the Labour government 70 years ago, but also argued that the service “does not belong to a single political party”.
Amid rising pressures on its services and lower-than-average funding increases, May said the rise in spending would form part of a longer, 10-year plan for the NHS.
“We cannot continue to put a sticking plaster on the NHS budget each year. So we will do more than simply give the NHS a one-off injection of cash,” she said.
Referring to last week’s decision to lift the visa cap on overseas NHS staff coming to the UK, May said that it was not right in the long term “to rely so heavily on highly qualified health professionals from parts of the world where they can be desperately needed”.
She said: “To do that we need to make careers in the NHS more attractive. We need to recognise that today working practices in the NHS have not caught up with modern lifestyles.
“Think of the nurse working beyond his shift for the fifth day in a row who can’t pick up his children from school.
“Think of the junior doctor with limited choice about where and when she works who has to alter her plans because rotas are changed at the last minute without her having any say.”