The government has suffered a defeat in the Lords over the right of EU citizens lawfully residing in the UK after Brexit to have physical proof of their status.

The cross-party amendment, proposed by Liberal Democrat peer Lord Oates, was backed by a majority of 41 peers.

In total, 270 peers voted for the measures and 229 voted against them.

Lord Oates said EU citizens covered by the settled status scheme should have the right to a physical form of proof of status instead of only the digital proof proposed by the government.

He said the right to remain should also be based on eligibility and not forfeited by failing to meet an arbitrary deadline under a cut-off date in June 2021, which could lead to EU citizens being “criminalised” afterwards.

Without physical proof of right of residence, there was bound to be “confusion” and “anxiety”  for such people in their dealings with officials post-Brexit.

“In the real world, in respect of permanent residence, proof of immigration status is in physical documentation,” Lord Oates said. “That’s what people are used to.

“EU citizens are going to be severely disadvantaged if they don’t have it.”

Labour Lords frontbencher Iain McNicol, who formally backed the amendment said: “The government has made a rod for its own back on this non-contentious issue, when it should have been listening to the sensible solutions from around the House of Lords.

“I hope Ministers take this defeat on the chin and find a way of accommodating our amendment to give people the reassurance they need.”

The bill will now go back to the Commons where MPs will have the opportunity to scrutinise and possibly reject the amendment. 

Later on Monday evening, the government crashed to a second defeat on ministerial powers over the courts to depart from European Court of Justice judgments.

Voting was 241 to 205, majority 36, for a cross-party amendment to delete the power from the Bill, amid warnings of it being an interference in the independence of the judiciary.

A third defeat for ministers swiftly followed the second as peers backed a move to allow cases to be referred to the Supreme Court to decide whether to depart from EU case law.