Re-opening Brexit deal holds potential dangers: May

Prime Minister Theresa May is clear on the potential dangers of re-opening the deal to leave the European Union, her spokesman said yesterday, adding that the withdrawal agreement was complete.

Some critics of the deal are pushing May to win more concessions from the EU to try to garner support for the agreement in parliament, which could reject it in a vote on December 11.

The EU has said the deal is the best on offer.

May is also meeting lawmakers to try to win their support for the deal, the spokesman said.

Earlier Finance Minister Philip Hammond warned that a Brexit outcome that left a large segment of the British people feeling betrayed would damage the country more than the small economic cost of Prime Minister Theresa May’s preferred Brexit plan.

If May loses the December 11 parliamentary vote on her deal it would open up possibilities that include a limited renegotiation, Britain leaving with no transition deal, a new election or even a second Brexit referendum, although the last is something May has ruled out.

Hammond told parliament’s Treasury Committee of the dangers of rejecting May’s plan and either not leaving the EU at all or abruptly breaking most ties with the bloc.

“Any solution which left the country divided, left a large segment of the population feeling betrayed, in my view, would have a negative political impact and societal impact that would far outweigh the very small economic impact that the White Paper scenario is showing here,” he told the committee.

Hammond said it would be “catastrophic” for Britain if it remained mired in the Brexit debate for years to come. “We have to resolve this,” he said.

A government analysis last week showed a plan similar to May’s preferred option would cause only a small amount of economic damage compared with staying in the European Union, while a “no deal” Brexit would hurt growth more.

Separate Bank of England analysis showed that in a worstcase “no deal” scenario, Britain would suffer a sharper recession than after the financial crisis.

The BoE would probably expect the government to step in to provide fiscal stimulus in that situation, due to its inability to cut interest rates at a time when sterling would be tumbling and inflation pressures mounting, Hammond said.

Years, not months, would be needed for Britain’s ports to be ready to handle the customs and regulatory checks required under the standard World Trade Organisation terms favoured by some Brexit supporters, he said.

“To be very frank with you... the planning system might struggle to approve such significant infrastructure changes in two years,” he said.

Meanwhile, in Edinburgh Scottish political parties yesterday joined forces to show their opposition to both May’s “damaging” deal for leaving the European Union and the possibility of a ‘no deal’ Brexit.

The symbolic vote — which was not supported by the Scottish Conservatives allied to May — was a rare example of nearunity on a constitutional issue in the nationalist-led devolved parliament.

It also showed the level of anger about Brexit in Scotland where most voters backed staying in the EU in the 2016 referendum.

The vote does not have any direct impact on the debate in Britain’s parliament.

“Scotland needs and deserves better than the prime minister’s blindfold Brexit,” Michael Russell, Scotland’s constitutional relations minister, told the chamber.

May’s Brexit meant “at least four more years of stagnation, lack of investment with no guarantee that a free trade deal will ever be struck,” he said.

US investment bank J P Morgan said the chances of Britain calling off Brexit altogether had increased.

As investors and allies tried to work out the ultimate destination for the world’s fifth largest economy, the Northern Irish party which props up May’s government said legal advice about the deal was “devastating”.

Nigel Dodds, the deputy leader of the Northern Irish Democratic Unionist Party, said the legal advice proved that Northern Ireland would be treated differently to the rest of the United Kingdom.

On Tuesday, just hours before the start of a five-day debate in parliament, a top law official at the European Court of Justice (ECJ) said Britain could pull back its formal divorce notice.