Brexit: No-deal planning will continue if Conservatives win election, Treasury minister admits

Rishi Sunak's comment confirms fears that the UK could crash out of the EU without an agreement in December 2020 under Boris Johnson's plans

Preparations for a no-deal Brexit will continue if Conservatives win the 12 December general election, a Treasury minister has said.

Rishi Sunak’s comment amounts to an admission that a no-deal crash-out remains an option at the end of 2020 under the terms of the agreement struck by Boris Johnson with Brussels.

The revelation came amid controversy over Jeremy Corbyn’s announcement that he will be “neutral” between Remain and Leave in the second Brexit referendum which Labour has promised in June 2020 if it wins the election.

Liberal Demcorat spokesman Chuka Umunna said Mr Sunak had "let the cat out of the bag".

"They are trying to take us out without any trade deal at the end of next year," Mr Umunna told Radio 4's Today. That's the big news this morning."

The prime minister insists there is “absolutely zero” prospect of the UK being forced to leave without a trade deal and be forced to operate on unfavourable World Trade Organisation terms when the year-long “transition period” contained in his agreement concludes.

But few trade experts believe the UK will be able to negotiate a free trade agreement (FTA) with the remaining 27 EU states in such a short space of time, as deals of this kind typically take several years to complete.

And opponents of Brexit warn that Mr Johnson’s decision to rule out any extension of talks beyond 31 December 2020 effectively means he will be forced to accept whatever terms the EU offers or crash the UK out without a deal.

Mr Sunak is a member of the ministerial committee, codenamed XO and chaired by Michael Gove, tasked with making preparations for a no-deal departure from the EU.

Asked by the Daily Telegraph whether the committee would continue to meet after the election, he replied: “Yep.”

The last XO committee on 29 October agreed meetings would be “paused”, with the “exact tempo going forward TBD”, the chief secretary to the Treasury said.

He added: “We hope we come back with a majority, in that case we will want to get this deal through, so in theory no-deal should not be something that needs to happen. But there are all sorts of scenarios that might happen.”

Mr Sunak said that XO’s work would be useful even if the UK leaves with a deal, saying: "Ultimately our goal for the future relationship is to leave the customs union, to leave the single market, that means a lot of the things we were preparing people to do will still be relevant."

No-deal operations, such as Project Kingfisher, have so far been named after birds. But Mr Sunak said he had proposed future documents could be given the names of dinosaurs like the tyrannosaurus or velociraptor.

Speaking on BBC Radio 4’s Today programme, health secretary Matt Hancock insisted that the FTA was “very much deliverable” within the 11-month time-scale following the UK’s proposed departure from the EU on 31 January.

(Rex Features) (Rex)

“The deal can be and will be done in time, not least because we are currently aligned with the EU,” said Mr Hancock.

“As Boris demonstrated over the summer, people said ‘You will never get a deal done before 31 October’ and he did. The way the EU negotiates is that everything comes down to the last moment and then they do a deal running up to the deadline.”

Mr Hancock said that the Department of Health had all its no-deal plans ready, adding: “You don’t have to re-do plans. We’ve got the plans ready.”

He denounced Mr Corbyn’s Brexit position as “extraordinary”.

Matt Hancock (Rex Features)

“He’s decided to be indecisive, he’s acted for inaction,” said Mr Hancock. “This position of neutrality from Jeremy Corbyn won’t wash with the voters.”

But Labour shadow cabinet minister Laura Pidcock said Mr Corbyn’s decision to be an “honest broker” in any Final Say referendum was “the brave position to have taken”.

“This isn’t about my personal opinion or Jeremy Corbyn’s personal opinion,” Ms Pidcock told Today. “This is about saying ‘What do the people want now?’”

Mr Corbyn has promised to negotiate a “credible” new Brexit deal with Brussels within three months if he wins power, before putting it to a referendum in June 2020.

Labour is expected to decide its position on the referendum at a special conference in the spring.

Ms Pidcock denied that having a negotiation team led by Remain-backing Sir Keir Starmer would undermine the prospects of a deal.

She said she expected the Labour negotiation team to negotiate the new deal would include members with “a variety of opinions” on Brexit, but added: “Irrespective of our own personal opinions, people are extremely professional in this process.”