Brexit secretary claims EU will start trade talks very quickly after no deal because of UK's 'size and importance'

EU leaders warned their unity will crumble as pressure from voters and businesses threatens stability of their own governments

The EU will give in “very quickly” after a no-deal Brexit and start talks on a trade deal because of the UK’s “size and importance”, Stephen Barclay has claimed.

The bloc’s unity will crumble under pressure from its voters and businesses once the “impact of no deal” is felt, the Brexit secretary told a committee of MPs.

Brussels has repeatedly insisted it will not move on to “phase two” trade talks if the UK crashes out without an agreement – unless and until obligations on the £39bn “divorce bill”, the Irish border and EU citizens are met.

But Mr Barclay said: “In the event of a no deal, the phase two issues would very quickly come into play.

“Clearly there would be a desire on both sides to see where improvements can be made – I don’t think anyone would seek to stay on a bare-bones WTO [World Trade Organisation] basis for a significant period.”

Mr Barclay added: “It’s fairly easy to be unified on asking the Brits to pay more money, the Good Friday Agreement – which people agree with – and citizens’ rights that they like.”

And, warning a crash-out Brexit would “bite” on the economies of particular areas of EU states, he told the MPs: “That has an interplay on coalition governments in those countries.”

He noted the “size and importance of the UK on the border of the EU” as a reason why Brussels would have to shift its stance.

During the evidence session, Mr Barclay also:

* Did not deny the National Farmers’ Union warning of a mass slaughter of lambs after a crash-out Brexit – but said farmers would be compensated.

* Denied a bust-up with Michel Barnier, the EU’s Brexit negotiator, because he insisted the withdrawal agreement would have to be ripped up. Mr Barclay says he had simply said the deal would not get through the Commons as it stands, adding: “I did not think that was a particularly controversial observation.”

* Criticised the car industry for saying no deal was “simply not an option” – saying that was “factually incorrect, because it was the legal position of the government”.

* Insisted fears of food and medicine shortages after a no-deal Brexit were exaggerated – confirming new ferry contracts would be struck, despite the Chris Grayling fiasco.

* Said the EU could still be allowed into UK waters under a no deal – as the UK sought a “continuity approach”.

Nick Boles, the former Tory MP who quit the party over its refusal to compromise on Brexit, attacked Mr Barclay’s relaxed attitude to the threat to farming.

“Conservative MPs’ ritual protestations of their commitment to British farmers are going to ring a bit hollow when they’ve turned large swathes of our countryside into a BBQ pit,” he tweeted.