EU referendum: Labour to join forces with rebel Tories to prevent Government campaigning for Yes vote

Labour is preparing to join with Tory Eurosceptic MPs to inflict an embarrassing defeat on the Government over its EU Referendum Bill.

Harriet Harman, Labour’s acting leader, suggested that the party was preparing to oppose plans that would allow the Government to actively campaign for a Yes vote in the EU referendum.

The move, if backed by the SNP, would almost certainly result in David Cameron’s first Commons defeat of the new Parliament and curtail his room for manoeuvre following any EU renegotiation.

Speaking during Prime Minister’s Questions, Ms Harman insisted that the poll “must be fair and be seen to be fair” and suggested that allowing the Government as a whole to actively campaign in favour of a Yes vote could undermine the pro-European case.

“Why are you changing the law to exempt the Government from the rules which are there to ensure the Government doesn’t inappropriately use public funds or the Government machine in the short campaign,” she asked the Prime Minister. “Will you think again about this?”

Mr Cameron said the reason the Government did not want to impose a period of “purdah” ahead of the election was in part because it could restrict ministers’ ability to engage with EU summits, European Court judgments or other issues emanating from Brussels.

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But he added: “The second issue I would raise – and I think this is a bigger issue – is when the negotiation is complete and the Government has a clear view, I don’t want us to be neutral on this issue, I want us to speak clearly and frankly.

“When it came to the Scottish referendum, I actually felt in the last few weeks before the referendum the UK government was often being advised it couldn’t take a view on the future of the UK. I think that was a ridiculous situation, which is why we have put forward the change to the purdah rules.”

Mr Cameron said it would be debated further during committee stage of the Bill.

But Ms Harman replied: “It’s not a change in the rules, it’s a blanket exemption – we must have a legal framework on the face of the Bill, we cannot be left just to rely on ministerial restraint.”

Labour sources suggested later that the party was seriously considering joining forces with Tory rebels to amend the legislation to reimpose purdah. “That is something we are actively discussing,” they said.

Under the Government plan, a ban on “promotional material” produced by “central and local government” normally put in place ahead of elections and referendums would be lifted for the EU referendum campaign.

The move would allow Government departments to use official resources to make the case for a Yes vote in the run-up to the referendum if David Cameron comes out in favour of Britain’s continued membership of the EU.

This was banned during both the recent Scottish Referendum and the 2011 AV campaign, but in a sign of bitter divisions within the Conservative Party a number of senior Tory Euro-sceptics have vowed to fight the plan.

“It’s completely unacceptable. It really is,” the former Environment Secretary Owen Paterson told The Independent.