Michael Gove says hopes of striking EU trade deal are falling

Michael Gove, UK Cabinet Office minister, said on Sunday his hopes of securing a trade agreement with the EU had fallen in recent weeks, as business groups urged both sides to step back from the brink of no deal.

Mr Gove said the EU had “pulled stumps” on trade negotiations by refusing to accept Britain’s status as an independent country, a cricket reference to ending play. Asked by Sophy Ridge on Sky News if he was still 66 per cent confident of a deal, as he said earlier this month, Mr Gove replied: “Less.”

But he said the door to further talks was “ajar” if the EU took a fundamentally different approach. Michel Barnier, chief EU negotiator, and David Frost, his UK counterpart, will speak by phone this week to see if there is a basis for resuming formal talks.

“We are not saying that if they change their position we won’t talk to them,” Mr Gove said, amid growing business concern that talks could fail and tariffs and quotas would be added to the mountain of red tape already associated with leaving the customs union and single market.

Brussels has said the call between Mr Barnier and Lord Frost will be an opportunity for the negotiators to “discuss the structure” of the talks, leaving open the possibility that negotiations could resume later in the week. 

One EU diplomat shrugged off Mr Gove’s comments as designed for “domestic consumption”. EU officials, however, acknowledged that the removal of the word “intensify” from a summit communiqué was an unintended mis-step that had been seized on in the UK.

The Dutch prime minister, Mark Rutte, on Friday said it had led to a “misinterpretation” that the EU was not committed to agreeing a trade deal. “That has been cleared [up] now,” he added. 

Mr Gove insisted Britain was ready to leave the EU without a deal, but said that regardless of whether there was a trade agreement business needed to step up preparations for the end of the transition period on January 1.

“The public, like me, would rather we had a free trade agreement,” he told the BBC’s The Andrew Marr Show. “But we need to be ready for every eventuality.”

On Sunday, more than 70 British business groups representing more than 7m workers issued a statement appealing to politicians to return to the table this week to strike a trade deal.

Organisations from across British business in automotive, aviation, chemicals, farming, pharmaceuticals, tech and financial services sectors have united to urge both sides to find a compromise over trade terms.

Bosses were alarmed by prime minister Boris Johnson’s move on Friday to end talks with EU negotiators and fear that what they see as a clear need for a deal to protect jobs and investment will be sacrificed for political motives.

The groups — ranging from the CBI, TheCityUK and TechUK to the National Farmers’ Union, British Retail Consortium and the Society of Motor Manufacturers and Traders — said that securing a quick agreement “matters greatly for jobs and livelihoods”.

In a statement they said: “With compromise and tenacity, a deal can be done. Businesses call on leaders on both sides to find a route through.”

Executives have warned that many companies are not prepared for the disruption, red tape and expense of having to trade with EU counterparts next year. 

Smaller companies in particular are struggling to prepare for a no-deal outcome as they seek to survive the economic downturn caused by Covid-19.

A poll of members by the Institute of Directors last week showed that nearly a quarter of companies may not be ready for the end of the transition period. Nearly half said they were not fully prepared.

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