UK still likely to leave the EU with a deal, insists Number 10

Number 10 was responding to Dr Fox’s assessment that a no-deal Brexit was now more likely than an agreed withdrawal, with the international trade secretary putting the odds at “60-40”.

Former Brexit secretary David Davis has said that the EU would be making a “massive miscalculation” if it thought the UK was not ready to walk away from talks without a deal.

Mr Davis – who quit the Cabinet over Mrs May’s Chequers plan – continued to insist that EU member states had more to lose from a failure to reach an agreement than the UK.

He told the Daily Telegraph: “This has great scope for being a massive miscalculation on the part of the EU that could end up with no deal by accident.

“It’s certainly not the intention of the EU to have a no-deal Brexit but they are misjudging us at the moment. The UK Parliament does not want no deal but it’s certainly not going to be pushed around by the European Parliament.”

Asked about Dr Fox’s comments, Mrs May’s official spokesman said: “We continue to believe that a deal is the most likely outcome, because reaching a good deal is not only in the interests of the UK, it is in the interests of the EU and its 27 members.

“But the trade secretary is right to say there is a risk of the negotiations not succeeding and the government has to prepare for all eventualities.”

The spokesman said the Brexit White Paper published last month following the Cabinet summit at Chequers was recognised by Brussels as “a significant move”.

“Following the publication of the White Paper, we are now in a serious conversation across a broad range of issues with the EU,” he said.

“They recognise that the White Paper represents a significant move by the UK and now they need to respond”.

Responding to a Financial Times report that chancellor Philip Hammond had privately warned City bankers to seek non-European business in preparation for possible restrictions on access to EU markets, the PM’s spokesman insisted the Chequers deal represented “the best option for getting a good deal for the City”.

The White Paper proposal “preserves the mutual benefits of integrated markets, protects stability and preserves the City’s global reach,” he said.

Mrs May had always stressed the importance of a “pragmatic and practical” approach to Brexit, said the spokesman, citing her speech in Munich in February in which she warned against allowing “competition between partners, rigid institutional restrictions or a deep-seated ideology” getting in the way of co-operation.

His comments came days after Mrs May held private talks with Emmanuel Macron at the French President’s Mediterranean holiday retreat of Fort Bregancon.

The European Commission rejected Dr Fox’s claim that “intransigence” from Brussels was getting in the way of a solution.

A Commission spokeswoman said Brussels was “working day and night, 24/7, for a deal” and would publish an agenda in due course for talks at official level on August 16-17.

Mrs May’s spokesman played down suggestions that the UK was trying to bypass Mr Barnier by seeking direct contacts with ministers of the 27 remaining member states.

The spokesman said negotiations were taking place with the European Commission and had seen “very active engagement” from Brexit secretary Dominic Raab, while there had also been “conversations” at ministerial and prime ministerial level with the EU27 nations.

Solicitor general Robert Buckland indicated that the government believes the leaders of the 27 EU states will come to play a more significant role as the deadline for a deal approaches in the autumn.

“The reality is that, as we get close to the wire, the views of the member states will become more important,” he told BBC Radio 4’s Westminster Hour.

And he indicated that the House of Commons’ Christmas break may have to be cut short if negotiations drag on beyond the target of October.

“The clock is ticking, parliamentary time will be very tight,” he said.”We are going to have to perhaps look at a few recesses and actually the time that we use in Parliament in order to make sure that everything is thoroughly debated.”

But Mrs May’s spokesman played down the possibility that Brexit could eat into the parliamentary recess, saying he expected legislation to be “debated by MPs in the usual way”.

Government sources have suggested that the EU’s own Lisbon Treaty could legally require Brussels to work towards a deal, the Telegraph reported.

Article 8 of the treaty states that the EU must “develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness, founded on the values of the Union and characterised by close and peaceful relations based on co-operation”.

Mr Davis said: “The Lisbon Treaty requires them to come up with a workable arrangement and that’s certainly not the description of their behaviour at the moment.”

Labour warned that a no-deal scenario would be a “catastrophic failure of government”.

Shadow Brexit secretary Sir Keir Starmer said Mrs May’s “reckless red lines” had contributed to the difficulties, along with splits in the Tory ranks and “fantasy Brexiteer promises”.