Dudley Council is at loggerheads with West Midlands Police after the force refused to move on an travellers at a transit site in Coseley over concerns their human rights would be infringed.
The issue – which has seen a group stay at the Budden Road site for longer than the allowed 28-day period – was raised during business questions in the Commons this morning by Dudley North MP Marco Longhi.
The Conservative MP said the decision "sets a terrible precedent for councils across the country, who may find they have wasted taxpayers money by following legislation set out by the place to invest in designated sites".
He added: "It can give indefinite leave to illegal stay, and no protection to landowners. It implies that the police can woke interpret and choose to follow laws other than this country's court instructions.
"Does this give further credence to the need to repeal the Human Rights Act, as I have been calling for for many months?"
Leader of the House Mr Rees-Mogg, said: "It is really important that we are all equal under the law, and it is fundamental that the law is carried out by the police.
"We are policed by consent, the police are us and we are the police, and for that to work, people have to have confidence that the law will be enforced."
He added that while he did not know the specifics of the case, the Government was "taking more action to deal with the issues around illegal campsites and associated criminality."
Dudley Council has applied for a High Court injunction to move on the travellers, who were due to leave the site on November 12.
Council leader Patrick Harley has called for borough police commander Chief Superintendent Kim Madill to be reassigned, claiming she had allowed her political views to affect her judgment.
Ch Supt Madill said in making her decision she had ensured the force was "recognising diversity" and "demonstrating our care and compassion for difference".