The chancellor, Philip Hammond, has said the UK’s relationship with China “has not been made simpler” by the defence secretary’s threat to deploy a warship to the Pacific.

Gavin Williamson continues to add to his gaffe-prone reputation Read more

In a thinly veiled rebuke to Gavin Williamson, Hammond told BBC Radio 4’s Today programme that decisions about the deployment of aircraft carrier HMS Queen Elizabeth should be a matter for the national security council.

Beijing reportedly pulled out of trade talks with Hammond earlier this month after Williamson announced that the carrier, carrying F-35 Lightning stealth jets, would be deployed to the region on its maiden operational voyage. Beijing has been involved in a dispute over navigation rights and territorial claims in the South China Sea.

Asked if the relationship with Beijing had been damaged by Williamson’s actions, the chancellor said: “It’s a complex relationship and it hasn’t been made simpler by Chinese concerns about Royal Navy deployments in the South China Sea.”

He added: “This is entirely premature. The aircraft carrier is not going to be at full operational readiness for another couple of years, no decisions have been made or even discussed about where its early deployments might be. And when those decisions are made, they will be made in the national security council.”

Hammond was speaking the day after Brexit talks in Brussels yielded no obvious breakthrough, and he said it was “always a possibility” that the UK would leave the European Union without a deal. “That is why the government is carrying out appropriate contingency planning.”

“I’m not denying the possibility,” he said. “The possibility is very clearly there and it is that possibility that is focusing minds on the compromise that is needed in order to get the deal through parliament.”

“I fully recognise that it is very uncomfortable that we are as close to the wire as we are, but I’m afraid that is just a feature of this kind of negotiation,” Hammond added. “We are making progress.”

Theresa May met the European commission president, Jean-Claude Juncker, on Wednesday evening in Brussels and repeated her demand for “legally binding changes” to the Irish backstop – which she says will allow her to get the withdrawal agreement through parliament.

A joint statement by the two leaders suggested there had been no progress, though they promised to talk again before the end of the month. They said they were “seized of the tight timescale and the historic significance of setting the EU and the UK on a path to a deep and unique future partnership”.

Hammond insisted on Thursday morning that there were signs of “some movement from the European side”. “The word guarantee is included in the joint statement last night [and that] was a significant step forward, I think,” he said.

“The acknowledgement from the European side that they would need to work with us on the alternative arrangement to the backstop, all of these are important steps forward.”

Asked about the possibility of an extension on the amount of time allowed for negotiation, he said it was risky to assume that the EU would allow negotiations to extend beyond the 29 March deadline.

“My own view is that what is driving the process at the moment is the sense of a deadline. It is the fact that that deadline is there that is getting the movement that we are seeing in Brussels,” he said.

“That is causing people across the House of Commons – not just in the Conservative party but beyond it – to be prepared to even begin to discuss compromise. And that is what happens, as people being to look at and contemplate the possibility of a no-deal exit and the damage that would do to the UK’s economy and standing in the world, they become more and more prepared to look at how we build that compromise.”

Though May has backed away from hopes of rewriting the Brexit withdrawal treaty, she is seeking stronger guarantees that the backstop would never come into force. The Brexit secretary, Stephen Barclay, and the attorney general, Geoffrey Cox, will arrive in Brussels on Thursday morning for further talks.

The hope is that Cox will be able to change his legal advice on the backstop, allowing Tory MPs to back the deal. His original legal advice, published in December, was that the UK could be trapped indefinitely in the backstop.