Theresa May has signalled there will be no transitional period to prevent a "cliff-edge" Brexit unless the UK manages to agree a deal with the EU on their future relationship.
The British prime minister has been under pressure to help businesses plan for the future by agreeing a time-limited transitional period by Christmas, but she told MPs that this “implementation phase” could only be agreed when a trade deal had been struck.
“The point of the implementation period is to put in place the practical changes necessary to move to the future partnership, and in order to have that you need to know what that future partnership is going to be,” she said.
Ms May said the EU's chief negotiator, Michel Barnier, had suggested both elements would need to be agreed by October 2018 in order to be ratified by all the national and regional parliaments in the EU in time for the day of the UK's exit in March 2019.
Ms May's spokesman repeatedly refused to elaborate on what she meant by her comments and declined to confirm whether there could be a transitional period if the UK was to leave without a deal and became reliant on World Trade Organisation terms.
Her remarks raise the prospect of the UK crashing out of the EU with no deal and no transitional period to cushion the blow in March 2019, which is likely to alarm businesses.
Business nerves
A spokesman for the UK Federation of Small Businesses urged the prime minister to agree a transition period as soon as possible.
“The longer the short-term uncertainty goes on, the more difficult it will become for small businesses with EU customers or supply chains to make investment decisions,” he said.
Also speaking in the House of Commons on Monday, DUP MP Ian Paisley called on Leo Varadkar to start pulling his weight rather than "attempting to throw his weight around" on the Border issue after Brexit.
Mr Paisley said the Taoiseach was potentially damaging his economy more than that of Northern Ireland, as he pressed Ms May to raise the issue with her Irish counterpart.
Ms May said Britain would work with the Irish Government and the European Union to ensure there was no return to the "borders of the past".
Playing with fire
Mr Paisley also accused the British Labour Party of “playing with fire” by saying that the peace process in Ireland could be at risk because of Brexit.
Ms May replied: "It is very important that all sides on this issue are very clear that we must ensure the Belfast Agreement is put into place and is recognised and respected in its entirety.
“It’s also important, and we want to ensure, that peace programmes that have been possible through our membership of the European Union can continue in the future.
"When it comes to the Border, and resolving the issue of the Border between Northern Ireland the Republic, it will of course be for us to work with the Republic of Ireland Government and with the European Union more generally to find the solution we all want to see, which is as I say no physical infrastructure at the Border and no return to the borders of the past."
Guardian/PA