George Osborne has said the EU has the "upper hand" in Brexit negotiations after the Government u-turned on claims that no deal would be better than a bad deal for the UK.

The former Chancellor, who backed Remain in the referendum, said it is a "basic error" to claim that the EU relies on Britain more than the UK does on its neighbours as he warned the country is not "ready to rash out" of the union in 2019.

Speaking on BBC Radio 4's Today programme he also called on Theresa May to do more for voters in the north of England by committing to new transport projects.