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Liam Fox declines to rule out backing no-deal Brexit if PM's agreement fails

File photo dated 09/10/17 of International Trade Secretary Liam Fox, who has said he is "not afraid" of Britain leaving the EU without a deal, and warned that those seeking to rule this option out are undermining the UK's negotiating position in Brexit talks. PRESS ASSOCIATION Photo. Issue date: Wednesday November 1, 2017. The leading Cabinet Brexiteer said suggestions in Europe that the UK should be "punished" financially for quitting the EU were "the language of a gang" which should be avoided so as not to damage the economic interests of EU citizens. See PA story POLITICS Brexit Fox. Photo credit should read: Stefan Rousseau/PA Wire

By Andrew Woodcock, Press Association Political Editor

International Trade Secretary Liam Fox has declined to rule out backing a no-deal Brexit if Theresa May's Withdrawal Agreement is voted down by MPs next week.

Dr Fox told the Commons International Trade Committee that no-deal was "hugely sub-optimal, compared to getting a deal" and all MPs should back Mrs May's agreement in the vote due by March 12.

But asked whether the Government would back no-deal in the vote scheduled for the following day if the agreement fails, he said: "Potentially all things are possible."

Dr Fox refused to confirm or deny reports that the Government is planning to slash tariffs on a large majority of goods imported into the UK if Britain leaves the EU without a deal.

Sky News reported that reductions were planned on 80% to 90% of imports in what would be the largest single liberalisation of the British economy in history.

Questioned by the cross-party committee about the reports, Dr Fox said that he personally felt it would be "beneficial" for proposed tariff rates to be published before the Commons vote on no-deal expected next Wednesday.

"It would be helpful for MPs when they are making a decision about what they thought about no-deal to have as much information in front of them as possible," said the International Trade Secretary.

But he said that it was a responsibility for the Treasury to decide the timing of any announcement.

"The Government will set out what it believes to be the correct tariffs if indeed we get to a no-deal scenario," he said.

Dr Fox dismissed as "hyperbole" suggestions that a no-deal Brexit would deal an "existential" blow to the UK economy.

"Would it be a problem, a specific problem for some industries?" he asked. "Yes, it could be.

"That's why I think all MPs should vote for a deal and that MPs who say 'These are the terrible consequences of no-deal' but consistently vote against a deal need to understand what they may be ushering in."

He added: "For the sake of continuity, particularly in trade, the best outcome is a deal with the EU and a Withdrawal Agreement."

Asked if he would vote against no-deal if Mrs May's deal is rejected by MPs, Dr Fox said: "I will abide by collective responsibility and I am not going to pre-empt discussions we might have in Cabinet about that."

Pressed on whether the Cabinet could decide to back no-deal in these circumstances, he replied: "Potentially all things are possible."

Dr Fox played down the significance of negotiating objectives published by the US for a future trade deal with Britain.

The objectives have sparked concerns over possible access for US corporations to the NHS market, as well as imports of foodstuffs which do not meet existing EU standards.

But Dr Fox said they were a first salvo ahead of trade talks which had not yet begun, and were "exactly what we expected to see, because it is exactly what the US has done in other trade negotiations".

Asked whether he could rule out the inclusion of the NHS in any US trade deal, Dr Fox replied that the Government will insist that "public service regulation will be exempt from the treaty".

Dr Fox was challenged over a Department for International Trade podcast which cost more than £100,000 but was downloaded fewer than 9,000 times.

Asked whether it represented value for money, he told the International Trade Committee: "It depends how many of the businesses who listened to it became exporters.

"If all the 9,000 who listened to it became exporters, I would say that's a successful project. If none of them did, I would question its value for money."

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