Foreign Secretary Dominic Raab says the UK will leave the European Union without a deal unless the EU changes its position – as Boris Johnson’s “war cabinet” meets for the first time to step up preparations for an agreement not being reached.
Mr Raab told Sky News the UK still wanted to strike a “good” new deal with the European Union but the “undemocratic” backstop must be scrapped.
This is an element of Theresa May’s withdrawal agreement that is essentially an insurance policy to avoid the return of a hard border on the island of Ireland. But opponents object to it because it would mean Northern Ireland continuing to follow some EU rules and regulations.
The hard line taken by the government was credited by traders for the pound falling to a fresh two-year low against both the dollar and euro.
He was speaking to Sky’s All Out Politics after it was revealed that the government is “working on the assumption” that the UK will leave the bloc without a deal on 31 October.
Mr Raab maintained the new government’s tough opening negotiating gambit, telling Sky News: “The EU’s response so far… it’s early days and you would expect the initial position to be robust and intransigent.
“But if their position is that there can’t be any change to a deal that failed three times, one the biggest defeat in parliamentary history in the House of Commons, then we would leave on WTO terms.
“It’s not just about the UK’s position, it’s about what the EU decides.”
When it was put to him that the EU was unlikely to reverse its longstanding refusal to consider scrapping the backstop, Mr Raab replied: “That’s for them to decide. They’ve been pretty stubborn throughout.
“Brexit is a decision taken by the UK people as one in a referendum and the response to Brexit by the EU will be something that they’ll need to take responsibility for.”
The foreign secretary said the government was “making progress” towards getting Britain ready for no-deal, adding: “We’ve got period between now and October to really make sure we’re ready to manage the risks.
“But also then to be able to take the opportunities of Brexit.”
In response to the stance being taken by the new government, sterling was trading below $ 1.23 on Monday afternoon as hedge funds reportedly increased their short positions to their highest level in almost a year.
The weaker pound has come at a bad time for holidaymakers heading abroad but it has helped the FTSE 100 hit its highest level this year.
Mr Johnson has promised Britain will leave the EU on 31 October, with or without a deal.
And he has made it clear that any new deal struck with Brussels must not include the backstop.
The PM will miss the first meeting of the so-called Brexit “war cabinet”, otherwise known as the exit strategy committee, as he is making his first visit to Scotland since entering Downing Street.
Michael Gove, who is in charge of no-deal planning, will chair the meeting in the PM’s absence.
He will also lead meetings of the daily operations committee, covering all aspects of preparations for leaving the EU.
The new committees have been set up to ensure Brexit is delivered by 31 October.
The daily operations committee will gather every weekday in the Cabinet Office Briefing Rooms, with the first meeting on Tuesday.
A Downing Street source said it was being structured so that the Treasury would be “a motor for delivering Brexit, not the anchor”.
The exit strategy committee will meet twice a week – and its next meeting on Thursday will be chaired by the PM.
A third committee has also been established – the exit, economy and trade committee.
It will also be chaired by the PM and will “have a broad remit and will handle write rounds [internal memos and communications on Brexit circulated around government]”, with a particular focus on future relationships around the world.