Brexit: David Davis admits Government has done no economic assessment of the UK crashing out of EU without deal

Rob Merrick
Deputy Political Editor
Wednesday 15 March 2017 10:41 GMT
David Davis says that he has not quantified the economic outcome of getting no deal for Brexit

The Brexit Secretary David Davis has stunned MPs by admitting the Government has done no economic assessment of the possible effects of crashing out of the EU with "no deal".

Giving evidence to MPs, Mr Davis insisted it was not possible to calculate the impact of the Brexit talks failing, adding: “I may be able to do so in about a year’s time.”

Mr Davis rubbished the Treasury’s pre-referendum forecasts of an economic crash if Britain left the EU with no fresh trade agreement.

But, when asked by the chairman of the Brexit select committee, if a new assessment had been carried out, Mr Davis replied: “Under my time, no.”

The admission came despite Mr Davis ordering Cabinet colleagues to prepare for what is widely seen as the growing likelihood of negotiations with EU leaders breaking down.

It drew sharp criticism from Labour MP Pat McFadden, who alleged: “Without an assessment, you have mortgaged the country’s economic future to a soundbite.”

But Mr Davis hinted no assessment of the Brexit options will be carried out, saying: “You don’t need a piece of paper with numbers on it to have an economic assessment.”

And he appeared to downgrade the Government’s pledge that the UK will enjoy the “same economic benefits” outside the EU, telling the MPs: “I was expressing an ambition.”

On the impact of crashing out with no deal, he said: “It’s not as frightening as some people think – but it’s not as simple as some people think.”

During the evidence session, with the committee shadowing his Department for Exiting the European Union, Mr Davis also:

* Said it was “probably right” that holidaying Britons will lose EHIC cards, which provide free or subsidised healthcare across the EU, but added: “I have not looked at that one.”

* Admitted he did not know the implications of leaving with no deal on the transfer of personal data, which is a crucial issue for the booming tech industry.

* Acknowledged UK producers of dairy and meat would face tariffs of up to 40 per cent under World Trade Organisation (WTO) rules – “the numbers in agriculture are high”.

* Described the argument that the UK could walk away without paying a penny to the EU, if no deal is reached, as “interesting” – “a very good start in this exercise”.

* Said he expected Northern Ireland would end up with a “very light border, not a hard border” with the Republic.

* Said he “assumed” the "Open Skies" agreement – which has slashed airfares across the EU – will be lost, although he would fight for a successor.

* Confirmed financial services firms are poised to lose "passporting rights" to trade in the EU, saying: “I would expect that to be the case, that’s an area of uncertainty.”

However, Mr Davis protested that the committee had not “asked me about the upsides” – which included being able to “relax things” for the 60 per cent of trade with countries outside the EU.

And he insisted Britain’s economic path would soon became clearer, once the negotiations get underway, saying: “When we finish building the Lego blocks, we'll build the house.”

Mr Davis also denied the triggering of Article 50 had been “delayed” from this week, after No.10 said it would now take place in the last week of March.

His department had never said the exit clause would be invoked this week – and he expected the Brexit bill to get Royal Assent tomorrow.

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