Chancellor has ‘no doubt’ about Brexit trade agreement despite plans to resume no-deal preparations

Chancellor Sajid Javid has refused to say whether he will set aside money to prepare for the possibility that the UK fails to secure a free trade agreement (FTA) with the EU by the end of 2020.

Mr Javid’s deputy Rishi Sunak effectively confirmed on Saturday that a crash-out on World Trade Organisation terms remains a possibility if the Conservatives win the 12 December election, as he revealed that the government’s no-deal preparations committee will resume meetings following the vote.

The chancellor insisted he has “no doubt” that an FTA can be negotiated within 11 months of the UK’s formal withdrawal from the EU, which will take place on 31 January if Boris Johnson wins an overall majority.

But many economists believe that this is insufficient time to conclude a complex and detailed negotiation, which usually takes several years to achieve. And Mr Johnson has ramped up the likelihood of a no-deal outcome by declaring he will not take advantage of the two-year extension to talks offered by the EU - a commitment set in stone in the Conservative manifesto.

Mr Javid's predecessor as chancellor, Philip Hammond, set aside "headroom" of £27 billion to prepare for the disruption to transport, food and medicine shortages and damage to buinesses likely in the case of a WTO crash-out, but that money has since been reallocated.

Asked whether he will set aside any money to mitigate the impact of leaving without an FTA on 1 January 2021, Mr Javid told Sky News’s Sophy Ridge on Sunday: “I think most of the work has already been done. We already start from a position where the EU and the UK is aligned, we’re agreed on all the key principles.”

He said that those warning about the possibility of failure to achieve an FTA were “scare-mongering”.

“I’m very confident that in the time that we’ve said that we will be able to agree our new economic partnership,” he said.

“The principles have already been agreed with the EU, we’ve already started a lot of the work. Obviously it’s on hold now because of the election, but if we are re-elected we’ll get back to that work, and we can get that deal done certainly by the end of next year, of that I have no doubt.”

Mr Javid said that it was “self evident” that the withdrawal agreement negotiated by Mr Johnson with Brussels will be implemented by the end of January if Tories win the election.

But he said there remained a possibility that the withdrawal deal will not go ahead in a hung parliament or a Labour overall majority.

“The only risk of no-deal is if there’s not a Conservative majority, I think that’s self evident,” he said.

“We’ve got a deal it is ready to go – literally ready to go. And we’ll bring it back, as we say today, before Christmas, it will be done by January, and then there is no prospect of no deal.

“But if we don’t win, if there is a Labour victory, a Corbyn/Sturgeon alliance or a hung parliament, the risk of a no-deal is back and and the country doesn’t want to see that.

“We’ve been through that, and as a country we want to move on with a deal that’s good for Britain, is good for our European friends, and we can then focus on so much else.”