Mel Stride MP explained a no deal Brexit ensures that the EU is more likely to reach a trade agreement with the UK sooner than if there is a Brexit extension. The Chair of the Treasury Select Committee noted an extension would take the pressure off to reach an agreement. It comes as Adam Boulton asked him: "We've heard from Nissan that they can't guarantee the future of Sunderland if there's a no deal Brexit at the end of the year. Do you think that's something the Government should now rule out even if it means an extension?"
Speaking to Sky News, Mr Stride said: "If you have an extension, you are in a sense taking the pressure off both parties including the EU to actually strike a deal.
"It seems to me as you look back over the history of our negotiations with the EU about Brexit it has unfortunately tended to require a cliff-edge to concentrate minds and hammer out an agreement.
"My personal view would be that we are better not to ask for an extension under these circumstances.
"It's most likely to create a dynamic that leads to a deal.
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Mel Stride MP explained no deal Brexit ensures that the EU is more likely to reach a trade agreement
Mr Stride explained a Brexit extension takes pressure off the EU
"But if the question is what effect will a no deal Brexit have on the economy?
"In my opinion that would be very negative and is something that both parties should be striving really hard to avoid."
It comes as Bank of England Governor Andrew Bailey has told banks to step up their plans for the risk of Britain failing to reach a post-Brexit trade deal with the European Union before a deadline at the end of 2020, Sky News reported.
Mr Bailey held a conference call on Tuesday with Britain's biggest lenders in which he emphasised that they needed to step up their plans for a no-deal Brexit.
It comes as Bank of England has said to prepare for a no deal Brexit
Brussels has been accused of "wishful thinking" over claims that the UK could be prepared to compromise on fishing and demands for alignment with European Union standards.
Downing Street accused the EU of failing to acknowledge the reality of the UK's status as an independent country as a fourth round of talks on a post-Brexit trade deal got under way.
The teams led by Boris Johnson's Europe adviser David Frost and the EU's negotiator Michel Barnier are meeting virtually for the latest round of discussions after previous sessions were described as "tetchy" and failed to make a breakthrough.
Progress needs to be made ahead of a high-level summit later this month between Mr Johnson and EU chief Ursula von der Leyen.
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The UK has already indicated it will walk away from the negotiations if there is no prospect of an agreement by the time of the summit.
A Times report suggested the UK would be willing to compromise on fisheries and the "level playing field" trade rules if the European Union agrees to back away from its "maximalist" demands related to regulatory alignment and fishing access.
"There is only one way to get things moving and that is for the UK side to move and then, as Frost knows full well, the EU will move too," a senior diplomatic source told the newspaper.
But the Prime Minister's official spokesman said: "This is wishful thinking by the EU.