The government has left it “very, very late” for a post-Brexit business plan, according to Brexit select committee chair Hilary Benn.
It comes after the House of Commons released a report warning ministers about the “overall state of readiness” for the end of the transition period in less than two weeks.
Speaking to Sky News, Mr Benn said: “It’s taken a long time to deliver a deal, and here we are with a few days to go and we still don’t have an agreement and that I think is the biggest problem given that we left the European Union at the beginning of the year.
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“It makes it very hard for businesses to plan if you don’t know what the arrangements for tariffs, for example, are going to be from the first of January.
“So, the government has left it very very late.”
The committee’s report said communications with businesses have been “patchy at best” and police may be forced to use “slower and more cumbersome” systems.
The MPs issued the warning in a report published on Saturday as both Downing Street and Brussels maintained it will be difficult to get a trade deal in place for 31 December.
Mr Benn said the government “still cannot provide business, traders and citizens with certainty about what will happen in all the areas affected by the negotiations”.
The Labour MP added: “With just seven working days until the end of the transition period, significant concerns remain.
“At this late stage, the government must be ready to implement contingency plans where necessary to mitigate the effects of any disruption. Failure to do so would mean the worst possible start to the new year for many people and businesses who are already experiencing the toughest of times.”
The cross-party committee said the results of the government’s attempts to communicate the incoming changes “appear patchy at best” and they warned that the combination of Brexit uncertainty and coronavirus could hamper UK businesses.
Provisions to ensure the UK border is “secure and safe” must be put in place while ministers must carefully monitor the effectiveness of alternative means of intelligence sharing for law enforcement.
The MPs continued: “The fallback systems for exchanging data are slower and more cumbersome.”
They warned that a EU-UK surrender agreement to replace the European Arrest Warrant is “unlikely” to be ready in time.
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‘Moment of truth’ in Brexit trade talks
The MPs welcomed the agreement on the implementation of the Northern Ireland Protocol, but called on Westminster to work with the devolved governments to “minimise traffic disruption” near British ports.
They raised concerns that key infrastructure decisions have been made “too late” and that the “late delivery” of IT systems for customs makes training and testing difficult.
And they warned trade with the EU may be hindered if sufficient numbers of customs and veterinary staff to perform checks and give advice are not in place.
The MPs concluded: “We are also concerned about the overall state of readiness. It is important that the government engages fully with the devolved governments and has robust contingency plans to deal with whatever happens after 1 January.”
Talks on a trade deal are continuing this weekend, with both sides warning the chances of an agreement remain in the balance.
Both Downing Street and the European Commission said the negotiations were still “ongoing”, but that significant differences remained over fisheries and the so-called level playing field rules.