Brexiteer Lord Jones said the British Government "can do better" than its proposed plan to have no say on European regulation while accepting EU rules after Brexit.
On the last day of parliamentary activity before recess, Brexit Secretary Dominic Raab announced the Government will keep parts of the European Communities Act to make sure EU law still applied in the UK.
But the former Trade Minister slammed the decision, telling LBC: "The problem is we are working towards saying we'll pay them £39billion, we don't want a say in anything that goes on in the future but we'll be bound by their rules.
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"The last time I read about that, it was called a colony."
Lord Jones voiced his concern about the politicisation of Brexit, calling on Brexiteers and Remainers to "pull together" to help secure a new trade deal with the EU to protect the future of UK commerce.
He continued: "Where I worry is that it's been intensely politicised. I don't want Remainers and Brexiteers to make political capital, I don't want the Labour Party trying to politicise and bring down the government. I want the whole country to pull together and say we have got to do this together as one country.
"I am hopeful there will be a deal, but at the moment, I'm holding my head in my hands, thinking this country can do better than this."
He also praised Theresa May following her visit to Emmanuel Macron at his summer retreat in southern France to thrash out details of the UK's exit from the EU.