No assessment of implications of leaving EU without a trade deal

No assessment of the economic implications of leaving the EU without a trade deal has been undertaken by the Government since last year’s referendum, Brexit Secretary David Davis has said.

Mr Davis confirmed that leaving under World Trade Organisation rules would mean tariffs of 30-40% on agricultural exports and 10% on cars, the loss of EHIC health insurance cards for travellers and passporting rights for financial sector firms, as well as departure from the EU-US Open Skies arrangements for air transport.

But he said it will be possible to devise mitigating action in response to these issues, and it would be “otiose” to estimate their economic impact until that work has been done.

He told the House of Commons Exiting the EU Committee that he expected to be able to provide forecasts in about a year’s time.

Mr Davis has briefed Cabinet colleagues to be ready for the “unlikely scenario” of the UK crashing out of the EU without a deal – a prospect which Foreign Secretary Boris Johnson said this weekend would be “perfectly OK”.

Prime Minister Theresa May has made clear that she regards no deal with the EU as being better than a bad deal.

Explaining that mantra, Mr Davis said: “She said that because in the emotional aftermath of the referendum, there were lots of threats of punishment deals and all the rest of it.

“We had to be clear that we could actually manage this in such a way as to be better than a bad deal, and that is true.

“I can’t quantify it for you yet. I may well be able to do so in a year’s time.”