The prospects of Labour opposing British membership of the European Union, or adopting a position of neutrality, has grown markedly after a vote at the annual Trades Union Congress. Delegates endorsed a statement saying that pressure for the TUC to support a vote for Britain to leave the EU would “intensify dramatically” if David Cameron negotiated a new European settlement that watered down workers’ rights.

The move came shortly after Jeremy Corbyn received an enthusiastic reception from TUC delegates in Brighton condemning Conservative ministers as “poverty deniers” and pledging Labour will no longer support an overall cap on welfare benefits. In a speech welcomed as a breath of fresh air by union leaders, the newly elected Labour leader claimed austerity was a political choice and a “more equal” Britain was “not a dream”.

But the TUC’s decision on Tuesday night to indicate that its position in the referendum would depend on the deal done by Cameron demonstrated increasing signs of division within Labour over the Europe issue. Speaking in the debate, Sir Paul Kenny, the GMB general secretary, warned the latest “government-sponsored attack” threatened to erode the whole tenet of social Europe.

“This brings those of us previously in the yes-to-Europe camp to the edge of fundamental change. The balance has gone, now a naked attempt by this government to remove fundamental rights will force us to ask ourselves a difficult question.”

The prime minister has been under pressure from business to include changes to workers’ rights in his negotiation package. There are conflicting reports on whether No 10 regards this as a priority. Polling has shown that a referendum on British membership could be close, with a fresh ICM poll suggesting 40% of the public would vote for Britain to leave the EU and 43% would vote to remain inside.

Although the TUC motion could simply be read as a means of putting some bargaining pressure on the government, there is deep concern among pro-European Labour MPs at the growing Eurosceptic mood, including in the newly elected leadership. There has long been a strand on the left that regards the EU primarily as a club for capitalism.

Senior Labour figures have been struggling in recent days over whether to agree that its support for UK membership in the EU is unconditional.

Yvette Cooper, the former shadow home secretary, told the Guardian she was happy for Labour to seek a different deal for Greece in the eurozone and to strengthen the agency workers directive. However, she believed the party should find a fixed position. “You argue for reform before, during and after the referendum rather than making our support for Europe conditional. I think it is really important that Labour has a strong yes campaign and a strong commitment to being part of Europe,” she said.

Lord Falconer, who was reappointed as shadow justice secretary by Corbyn, threatened on Tuesday to quit the shadow cabinet if Labour’s EU position changed. “If the Labour party adopts a position which says we might leave the EU and might argue against it, then of course my position would become impossible at that point. But that’s not the current position,” he said.

“My view is we should stay in the European Union come what may.”

Hilary Benn, the shadow foreign secretary, said leaving the EU would do nothing for workers. “The truth is that if we want to protect workers rights the answer is not to leave the EU, but to get rid of this Tory government,” he said.

In his speech, Corbyn avoided the issue of Europe and largely focused on the differences between Conservatives and Labour on the economy. Describing himself as a proud trade unionist, he expressed support for workers on strike.

Jeremy Corbyn accuses the Conservative government of being ‘poverty deniers’ during his first official speech as Labour leader. Guardian

“They call us deficit deniers; they spend billions cutting taxes for the richest families and for the most profitable businesses. What they are is poverty deniers.

“They are ignoring the growing queues at food banks, they are ignoring the housing crisis, [and] they are cutting tax credits … let’s be clear: austerity is actually a political choice that this government is taking and they are imposing it on the most vulnerable and poorest in society,” Corbyn said.

He also signalled a change in policy on welfare, hardening Labour’s opposition to the government’s welfare reforms, by pledging to oppose the cap on the total amount of benefits that a person can receive. At the last budget this was cut to £20,000 a year for families in the UK, rising to £23,000 in London.

“We oppose the benefit cap. We oppose social cleansing. We will bring the welfare bill down by controlling rents and boosting wages, not by impoverishing families and socially cleansing our communities,” Corbyn said.

Labour had abstained on the welfare bill at second reading after Harriet Harman, then acting leader, ordered her MPs to do so because she wanted to show that the party understood the public’s concerns about welfare. At the general election the party was committed to keeping the welfare benefit cap, although it did say it would examine the case for regional variations.

Corbyn also disclosed that Labour has gained 30,000 new members since he was elected on Saturday, adding that party membership had reached about a third of a million. “It is a very fast journey at the present time,” he said.



Kenny welcomed the speech, and described it as a “staggeringly different approach to previous Labour party leaders that have addressed the TUC. There [were] no walkouts this time, it was standing room only. There is very much in Jeremy’s leadership for the working people of this country.”

• This article was amended on 25 September 2015. An earlier version said incorrectly that the TUC had voted to recommend that Britain leave the EU if David Cameron negotiated a new European settlement that watered down workers workers’ rights



