Brexit: Boris Johnson says no-deal with EU 'very good option'

'Obviously if we can’t then we will have the very good option also of an Australian-style arrangement,' says PM

Boris Johnson has suggested the prospect of a failing to reach a trade deal before the end the Brexit transition period would be a “very good option” for the UK.

The prime minister’s remarks come after the German chancellor, Angela Merkel, warned the EU must prepare for the possible failure of the Brexit trade talks, saying progress in the negotiations had been “to put it mildly, minimal”.

Attempting to strike a more upbeat tone, Mr Johnson told LBC radio: “We now need to make sure we get a good deal. I think actually – I’ve had some very good conversations – with friends and colleagues around the EU. I’m a bit more optimistic than Michel [Barnier] is there.

He added: “I just think there’s a good agreement to be reached, but obviously if we can’t then we will have the very good option also of an Australian-style arrangement.”

However, Australia does not have a free trade agreement with the EU, and the UK government has consistently used the term “Australian-style arrangement” as a euphemism for leaving the bloc without a deal at the end of the 11-month transition period.

Earlier this year, Phil Hogan, the European Commissioner for trade, outlined that the EU does “not have an agreement with Australia” and said of the UK seeking an “Australian-style” deal with the bloc: “I think that’s code for no deal.”

Mr Johnson’s comments also follow the latest round of talks over a future trading agreement, with the UK’s chief negotiator, David Frost, warning “significant differences” remain between London and Brussels.

Michel Barnier, his opposite number, said after four days of discussions between the UK and EU “serious divergences remain”, adding: “The EU side has listened carefully to the UK prime minister Boris Johnson’s statements in recent weeks, in particular, his request to reach a political agreement quickly, and his red lines.”

But he added that “the EU expects, in turn, its positions to be better understood and respected” in order to reach an agreement before the end of the Brexit transition period in December – at which point the UK will leave the bloc without a deal if no agreement is in place.

Responding to Mr Johnson’s comments on Friday, the acting Liberal Democrat leader Ed Davey said: “There are thousands of businesses in the UK that are only just keeping their heads above water after lockdown.

“The fact that the prime minister is willing to risk the economy on an ‘Australian style’ deal could sink them. The UK is facing it worst economic crisis in three centuries with record numbers of jobs and businesses at risk, yet Boris Johnson seems hellbent on making their situation worse. The PM wanted to level up our country and instead he is demolishing our economy.”