A government minister has criticised businesses for taking a “head in the sand approach” when preparing for post-Brexit trade.
Treasury and Cabinet Office Minister Lord Agnew said traders “really must engage in a more energetic way” to be ready for the end of the transition period on 31 December.
But one industry leader called the comments “outrageous”.
The UK and EU are still holding talks to negotiate a post-Brexit trade deal.
The UK’s chief negotiator, Lord David Frost, is in Brussels for discussions, with No 10 saying he believed “there was still a deal to be done”.
Prime Minister Boris Johnson said the talks were at a “crucial stage”, but he has set a deadline of this Thursday to come to an agreement – after which he has said the UK is ready to “walk away”.
The BBC understands the PM will speak to the European Commission President Ursula von der Leyen on Wednesday evening.
Germany’s Europe Minister, Michael Roth, said on Tuesday that the EU was prepared for the “worst-case” no-deal scenario.
But both sides have said they want to get an agreement in place.
The UK entered an 11-month transition period when it left the EU on 31 January, meaning it continued to follow the bloc’s rules while a trade deal was negotiated.
Talks have been taking place since March, but there are still sticking points on finalising a deal, including government subsidies to business – known as state aid – and fisheries.
If an agreement is not made by the end of the transition period, the UK will go on to trade with the bloc on World Trade Organisation rules – something the PM said on Tuesday “holds no fear”, but critics worry will damage the economy.
Speaking in the Commons on Tuesday, Foreign Secretary Dominic Raab said “the scope and prospects for a deal are there” and he was “hopeful that we can close the gap”.
But, he added: “Ultimately it will require the same goodwill, the same pragmatism and the same flexibility on the EU side that the United Kingdom and this prime minister have shown.”
Asked by Treasury Committee chair Mel Stride whether the UK would be in “the right position on day one” after the transition period when it came to trading, Lord Agnew said the country was in “reasonably good shape” when it came to customs issues.
But he said: “The bit that worries me the most is trader readiness”.
Lord Agnew accused businesses of taking a “head in the sand approach” to preparing, which he said had been “compounded by what I’d call the quadruple whammy of two false alarms – the two [Brexit] extensions at the very last minute, then followed by Covid and now followed by the recession”.
He added: “The traders are not as ready as they should be.
“And if there is one headline that I hope comes out of this appearance today, I hope it is to send another shot over traders bows to warn them that it is their businesses that are at stake from the first of January and they really must engage in a more energetic way.”
Labour MP Rushanara Ali, who sits on the committee, criticised the minister, saying it was “quite clear businesses are being set up for blame game if there are massive delays and disruptions when new customs arrangements come in on New Year’s Day 2021”.
Industry figures have also condemned the comments, with the chief operating officer of the Food and Drink Federation (FDF), Tim Rycroft, saying he didn’t think it was “accurate or helpful for ministers to assert that traders have not engaged in Brexit planning”.
He added: “If any traders have their head in the sand it’s because, after many frustrating months awaiting critical answers, they probably think it’s more likely they’ll find those answers in the sand than they will from the government.”
The deputy director general of business lobby group the CBI, Josh Hardie, said firms were “doing all they can to prepare for Brexit”, but there needed to be “common sense and compromise” from the UK and EU.
He said the “best way to help preparations is to agree a deal in the coming weeks” as it will “give businesses more certainty on what they need to prepare for and allow government to focus on the key actions that will protect jobs”.