Brexit Secretary Steve Barclay said a no-deal scenario could be “mitigated” and was preferable to giving up on the process of leaving the European Union.
Mr Barclay stressed that he was committed to getting Theresa May’s deal and the Withdrawal Agreement Bill through Parliament as the best way to deliver Brexit.
But if as the clock ticked down to October 31 the UK was faced with the choice of a no-deal Brexit or revoking Article 50 and staying in, Mr Barclay said the negative effects of leaving without an agreement could be limited.
He said: “The division in the Labour Party over the second referendum, I think that’s why they’ve not been able to move forward.”
Mr Barclay has said that if the Withdrawal Agreement Bill is defeated, the deal thrashed out with the EU would be “dead” and the UK would be left with the options of no deal or no Brexit on October 31.
Speaking during a visit to a cement works on the border with Ireland in Derrylin, County Fermanagh, Mr Barclay acknowledged the disruption a no-deal scenario would cause but it was better than cancelling Brexit.
“I think both options are undesirable but I think on no-deal we would have to do all we can to mitigate the disruption – there would be disruption and I have always been quite candid about that, which is why I think a deal is what we should be backing.”
But revoking Article 50 and “the biggest vote in our history” would cause damage to democracy, while another referendum would mean a further year of uncertainty for business.
“The damage if we were to go back on our vote would be huge,” he said.
The failure to reach a deal with Labour means the Withdrawal Agreement Bill faces a tough task getting through the Commons.
He insisted the Government had been prepared to compromise during the negotiation process.
“It is clear, and even some of the Labour negotiating team has said, that the Government has moved,” he said.
“There has been movement on things such as the phase two negotiating objectives and the role of Parliament. There has been movement in terms of workers’ rights, there has been movement in terms of commitments on environmental standards.
“We were having discussions around where we were on customs arrangements, or the benefits of a customs union.
“The issue is, if it is the case that for people like Keir Starmer and Emily Thornberry there is no deal that is acceptable without a second referendum, then it begs the question ‘why have they taken six, seven weeks for talks?’”
Labour said the leadership battles at the top of the Tory party meant that any deal that could have been reached may not have survived under Mrs May’s successor.
Mr Barclay was asked if he wanted to run for the top job – and responded with a joke aimed at Cabinet colleague James Brokenshire over his much-mocked kitchen photo shoot.
“I am focusing on what I am doing,” he said. “I will leave it to my colleagues to pose in their kitchens.”
