Theresa May is “failing Britain” in the Brexit negotiations, Jeremy Corbyn is to warn in a major speech as he claims the pro-Brexit wing of the Conservative party is actively seeking a no-deal outcome to turn the UK into a “deregulated tax haven”.

In a speech at the Co-operative party conference on Saturday, Mr Corbyn will also hail Labour’s “new consensus for the economy” and suggest gig-economy firms such as Uber and Deliveroo could be transformed into co-operatives so employees can collectively set pay and conditions.

The Labour leader’s comments come after Michel Barnier, the European Commission’s chief Brexit negotiator, warned the talks had hit a “disturbing deadlock” in Brussels and had completely ground to a halt on the question of post-Brexit payments – often referred to as the divorce bill.

The Prime Minister also used an appearance in the Commons this week to outline how the Government is preparing for all possible outcomes in the negotiations, including allocating funds for the talks collapsing without a deal.

“With each passing day they are driving us closer to a no deal Brexit,” he said. “Let’s be clear: no deal is the worst possible deal. It would leave us with World Trade Organisation tariffs and restrictions instead of the full access to European markets we need.”

“The Tories are transparently failing Britain in the Brexit negotiations. They are making a shocking mess of Brexit. They are split down the middle, negotiating with each other instead of the EU.

“The risk would be that key manufacturers leave for the European mainland, taking skilled jobs with them. In sector after sector, ‘no deal’ could prove to be an economic disaster.”

“Theresa May’s Cabinet of chaos is rising a jobs meltdown across Britain. A powerful faction of the Conservatives want a no-deal outcome because they think they can use it to turn our economy into a deregulated tax haven. We must not let them.”

Mr Corbyn will also use his address to describe the Conservatives’ economic model as “broken”, citing the International Monetary Fund (IMF), which claimed this week that higher income tax rates for the rich would help reduce inequality.

Hailing Labour’s “new consensus” for the economy, he will say: “The Chancellor Philip Hammond says that Labour poses an ‘existential challenge to our economic model. He is absolutely right, we do. “I am not going to sit back when their economic mode allows homelessness to double, four million children to live in poverty and over a million people not getting the care they need.

Labour Conference 2017 – in pictures Show all 14 1 /14 Labour Conference 2017 – in pictures Labour Conference 2017 – in pictures Britain's opposition Labour Party Leader Jeremy Corbyn delivers his keynote speech at the Labour Party Conference in Brighton Reuters/Toby Melville Labour Conference 2017 – in pictures Senior members of Britain's opposition Labour Party listen to Leader Jeremy Corbyn deliver his keynote speech at the Labour Party Conference in Brighton Reuters/Peter Nicholls Labour Conference 2017 – in pictures Diane Abbott receives a standing ovation during Jeremy Corbyn's speech at the Labour Party conference BBC Labour Conference 2017 – in pictures Labour Leader Jeremy Corbyn addresses delegates on the final day of the Labour Party conference on September 27, 2017 in Brighton Leon Neal/Getty Images Labour Conference 2017 – in pictures Labour Leader Jeremy Corbyn stands with Shadow Secretary of State for Business, Energy and Industrial Strategy Rebecca Long-Bailey (left) and Shadow Secretary of State for Education, Angela Raynor after speeches in the main hall, on day three of the annual Labour Party Conference on September 26, 2017 in Brighton Getty Labour Conference 2017 – in pictures Angela Rayner, Shadow Education Secretary, addressing the Labour Party annual conference at the Brighton Centre, Brighton PA Labour Conference 2017 – in pictures The mayor of London Sadiq Khan delivers a speech at the Labour Party Conference in Brighton, Britain Reuters Labour Conference 2017 – in pictures Dennis Skinner addressing the Labour Party annual conference at the Brighton Centre, Brighton PA Labour Conference 2017 – in pictures John McDonnell MP, Shadow Chancellor of the Exchequer Labour Party Conference, Day 2, Brighton Rex Labour Conference 2017 – in pictures Shadow Chancellor of the Exchequer John McDonnell (C) speaks with Labour party's leader Jeremy Corbyn (L) ahead of making a speech on the second day of the Labour Party Conference AFP/Getty Images Labour Conference 2017 – in pictures Labour Leader Jeremy Corbyn addresses supporters during a momentum rally on the first day of the Labour Party conference Getty Labour Conference 2017 – in pictures Jeremy Corbyn listens to speeches in the main hall on the first day of the Labour Party conference Getty Images Labour Conference 2017 – in pictures Labour Shadow Home Secretary Diane Abbott addresses delegates in the main hall on the first day of the Labour Party conference on September 24 Getty Labour Conference 2017 – in pictures Jeremy Corbyn addresses a rally ahead of the Labour Party Conference in Brighton Reuters

“The new consensus will reward the real wealth creators - that means all of us. It will genuinely value people and communities - and invest in them. It will create an economy fit for the 21st Century, with a state that’s not afraid to act when something goes wrong, but also takes action to make sure things work in the first place.”

He will add that the “gig economy firms” like the taxi service Uber could be replaced by co-operatives, in which drivers collectively set pay and conditions and share or re-invest the profits from their work.