Britain has a Brexit backup plan if talks fail, says minister

By William James

LONDON (Reuters) - Britain is drawing up contingency plans for the unlikely event it has to walk away from divorce talks with the European Union without a deal, Brexit minister David Davis said on Sunday.

Prime Minister Theresa May is set to begin exit talks by the end of the month, kicking off Britain's most complex set of negotiations since the end of World War Two. The outcome will shape Britain's political and economic future.

Ahead of the start of negotiations, which could be triggered as early as Tuesday, a committee of lawmakers warned it would be a serious dereliction of duty if the government failed to plan for the possibility of not reaching an exit deal.

"I don't think, firstly, that is remotely likely," Davis told the BBC's Andrew Marr Show, responding to the report. "It's in absolutely everybody's interest that we get a good outcome."

Parliament's Foreign Affairs committee warned that a breakdown in negotiations would be a "very destructive outcome", causing economic harm to both sides as well as creating uncertainty and legal confusion for individuals and businesses.

"The simple truth is we have been planning for the contingency - all the various outcomes, all the possible outcomes of the negotiations," Davis said.

"One of the reasons we don't talk about the contingency plan too much is that we don't want people to think 'Oh, this is what we're trying to do.'"

Asked when May would trigger talks, Davis declined to name a specific date. "Each date has different implications in terms of when it could be responded to by the (European) council ... I'm not going to get into the details why, but there's politics in terms of achieving success."

NO VETO

Before May can begin negotiations, she must finish passing the legislation that gives her the right to formally notify the EU of Britain's intention to leave and start a two-year negotiating period as set out in the EU's Lisbon treaty.

The laws are expected to be finalised in a series of votes early next week, which will test May's authority over her Conservative Party as she seeks to overturn changes made to the draft bill by parliament's upper chamber.

For more on when May could trigger exit talks, see:

The government suffered two heavy defeats in parliament during the legislative process, inserting conditions into the bill saying May must guarantee the rights of EU nationals living in Britain and give lawmakers more powers to reject the final terms she reaches with the EU.

Facing a possible rebellion from Conservatives who want to vote on the final Brexit terms, Davis urged lawmakers to back May's Brexit strategy and overturn those changes because they would tie the government's hands in the negotiations.

"What we can't have is either house of parliament reversing the decision of the British people - they haven't got a veto," Davis said.

(Editing by Stephen Powell)