Labour leader says May should have made guarantees immediately after Brexit vote rather than waiting for negotiations

Theresa May’s proposals to preserve the rights of 3 million EU citizens living in the UK have been condemned by Jeremy Corbyn and other opposition MPs as “too little, too late”. The Labour leader said guarantees should have been made directly after the vote to leave the European Union last year rather than waiting until “complex and delicate” trade negotiations began.

All 3 million EU citizens resident in Britain will have to apply to be on a “settled status” identity register after Brexit, under Home Office proposals about their future rights released today. A 15-page policy paper proposes a new “light-touch” online system to process applications that will give applicants the same “indefinite leave to remain” status as many non-European nationals who have also lived in Britain for five years.

Brexit phrasebook: citizens’ rights The rights and protections offered to all EU citizens under EU law, including free movement and residence, equal treatment and a wide range of other rights related to work, education, social security and health. See our full Brexit phrasebook.

Addressing the Commons, and with the government benches noticeably half empty, Corbyn said the offer the prime minister made in Brussels was poorly timed and left EU citizens in limbo. “The truth is it is too little, too late. That could have been done and should have been done a year ago when Labour put that very proposal to the House of Commons.

“But by making an offer only after the negotiations have begun, the prime minister has dragged the issue of EU citizens and families deep into the complex and delicate negotiations of our future trade relations with the European Union, which she herself has been willing to say may result in failure.

“This isn’t a generous offer. This is confirmation the government is prepared to use people as bargaining chips,” he said.

In response, May said she had addressed the issue of EU citizens’ rights as soon as possible. “People who say that we should be not dealing on this as a reciprocal basis simply don’t understand what negotiations are about, because the other side will be negotiating on these issues,” she said.

May was also asked by Corbyn whether she had been the only cabinet member to oppose guaranteeing EU citizens’ rights after the referendum, as reported in George Osborne’s Evening Standard. May said that was “not her recollection”, to jeers from the Labour benches.

Corbyn asked May to rule out the possibility of no deal being a viable option. May replied by saying that the Labour leader would “negotiate the worst deal”.

“He talks about the issue of no deal being better than a bad deal. I’ll tell him what I worry about in terms of a bad deal: I worry about those who appear to suggest in Europe that we should be punished in some sense for leaving the European Union,” she said.

Yvette Cooper, chair of the home affairs select committee under the last parliament, questioned whether EU citizens who were given settled status would lose that status if they left the UK for two years. “If there are French parents whose daughter is studying in Paris and who is 19, and they have been living here for more than five years, will that daughter be able to return to live with them here without them having to pass the income threshold?

“If they have been living here for less than five years, will they still have all the same rights as if they had been living here for more than five years?” she said.

May said such children of EU citizens would not have to pass an income test. Cooper later tweeted that contrary to May’s reply, the children of EU citizens would have to pass an income test if they returned from a lengthy stay abroad.

Brexit phrasebook: four freedoms The fundamental pillars of the EU’s single market: free movement of goods, capital, services and people. See our full Brexit phrasebook.

Meg Hillier, the Labour MP who chaired the public accounts committee in the last parliament, asked whether the prime minister could give an indication of the costs for applying for settled status. May said this was still being explored by the Home Office.

The Liberal Democrats’ Brexit spokesman, Tom Brake, said the proposal offered very little and showed that the government was continuing in its callousness. “Theresa May should be utterly ashamed this is the best they can come up with, a year on. It offers little in the way of reassurance to EU citizens who have made Britain their home and continues to use them as bargaining chips.

“These people play by the rules, pay taxes and make Britain what it is. Theresa May is treating these people like dirt and we should unilaterally guarantee these people’s right to stay,” he said.

Ian Blackford, the Scottish National party’s recently appointed Westminster leader, said it was “more than concerning” that the plan for EU citizens leaves “many more questions than it does answers”. He asked May to confirm that EU residents in Scotland would not have to fill out “the 85-page paper form for residency”.

May replied that the Home Office was working to introduce a streamlined, light-touch approach so this did not happen.