Cabinet minister downplays concerns thousands of businesses could fold following a hard Brexit

Lord True (left) aswering a question from Baroness Hayter of Kentish Town (right) concerning Brexit

Lord True (left) aswering a question from Baroness Hayter of Kentish Town (right) concerning Brexit negotiations - Credit: Archant

A cabinet minister has downplayed business concerns that thousands of companies could fold if hit with the economic repercussions of a hard Brexit during the coronavirus crisis.

Cabinet office minister Lord Nicolas Edward True told a virtual session of the House of Lords that the prime minister was powering ahead with plans to exit the Brexit transition period with or without a deal by December 31.

He told peers the government was following the 'direction' of the British people, telling businesses the end-of-year deadline was one they could work with. He said: 'The deadline set out by parliament is a certain date on which business can plan and we intend to maintain that.'

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Labour Lord Dubs warned business could go bust if forced to deal with the economic fall out of Brexit while still recovering from the impacts of the coronavirus pandemic.

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He said: 'Surely giving us a deadline, an almost unreachable deadline, will only add to the uncertainty affecting business.

'We won't get out of the present pandemic unless we drop this idea of a having a deadline and concentrate on the real issues that matter to the country.'

Fellow peers agreed. Lord Baroness Hayter of Kentish Town said without an extension or a deal by the end of the year, the country faced 'dire consequences to our trade and finance because of Covid-19'.

Tory Lord Bowness questioned the logic behind ruling out an extension when the government could not be sure of what 'the situation we will be in next week, never mind the situation... come December'.

The Tory peer assured them that although talks had been bumpy, his government was determined to reach a 'constructive and amicable relationship' with the EU and that there were 'good areas of convergence' in the first round of discussions despite several hiccups.

The exchanges came after the EU's chief negotiator, Michel Barnier, said talks last week had been 'disappointing'. The UK failed to agree on key trading point and while missing a deadline to submit draft proposals on the level playing field, fisheries, and justice and security.

The government has ruled out seeking an extension, even if asked by the EU out of fears it could be left paying into the bloc's schemes after December 31. It has until the end of June to apply for an extension.

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