No-deal Brexit would leave UK ‘deeply damaged’, report warns
THE UK would be “deeply damaged” by a no-deal exit from the EU, a hard-hitting report has warned as Prime Minister Theresa May battles to move the Brexit talks forward.
Withdrawing without an agreement in place would not only hurt the economy, but also hit areas like aviation, counter-terrorism and nuclear safeguards, the Lords EU Committee found.
The report says that it is “difficult, if not impossible, to envisage a worse outcome for the UK” than a no-deal scenario.
Plaid Cymru peer Lord Wigley said: “Wales is an exporting country. Tearing up our economic links with the single market and customs union after we leave the EU would have a significant impact on our businesses who will then face tariffs and regulatory barriers to trade.”
The UK Government insists a deal is within reach but Cardiff South and Penarth Labour MP Stephen Doughty said: “This devastating report reveals just how destructive no deal would be for our country. Brexit is already making working people worse off, as the value of the pound has collapsed and prices have shot up in the shops.”
THERESA May yesterday pledged to protect the UK’s “constitutional integrity” in the negotiations to break the deadlock in the Brexit talks over the Irish border.
The Prime Minister, who had spoken earlier by telephone to Democratic Unionist leader Arlene Foster, said the government was committed to ensuring there was no return to a “hard border” between Northern Ireland and the Republic.
However, she told MPs at Prime Minister’s Questions the issue could only be finally resolved once negotiations with the EU move on to the second phase – including talks on a free trade deal.
Her comments came after the DUP scuppered a deal on Monday to enable the talks to move to the second phase, saying they could not accept the government’s proposal that there should be continued “regulatory alignment” between the North and the Republic.
Mrs Foster said it amounted to imposing a “border in the Irish Sea” between Northern Ireland and the rest of the UK.
Mrs May said: “We will ensure that there is no hard border between Northern Ireland and the Republic of Ireland.
“We will do that while we respect the constitutional integrity of the United Kingdom and while we respect the internal market and protect the internal market of the United Kingdom.
“That is the point of the second phase of the negotiations, because we aim to deliver this as part of our overall trade deal with the European Union and we can only talk about that when we get into phase two.”
The Prime Minister had originally been expected to speak to the DUP leader on Tuesday in an attempt to resolve their differences.
Mrs Foster has complained that her party was only shown the proposed text regarding the Irish border late on Monday morning, around the time the Prime Minister was sitting down to lunch in Brussels with European Commission president JeanClaude Juncker.
The EU insists trade negotiations can begin only after “sufficient progress” has been made on the three key divorce issues of the Irish border, citizens’ rights, and the UK’s exit bill.
Dublin has warned that unless the UK provides cast-iron guarantees that the border will remain open, it will not allow the Brexit talks to expand to trade relations.
Meanwhile, Brexiteers in the Cabinet were reported to have voiced unease about the prospect of the UK signing up to any deal which would stop it diverging from EU regulations on issues like food safety, environmental protection and workplace rights after Brexit.
Foreign Secretary Boris Johnson said the UK had to take back control of “our borders, of our laws and UK cash contributions”.
As he arrived for a Nato summit in Brussels, Mr Johnson said: “We will come up with a solution, but the important thing is that that solution can only be discovered in the context of discussions on the end-state of the UK’s relations with the rest of the EU.
“We need to get on with those negotiations now, so all the more reason to get on with stage two of the negotiations.
“What I would say is that the best way to sort it out is to get on to the second phase of the negotiations, where all these difficult issues can be properly teased out, thrashed out and solved.”
He added: “I think the important thing is that what we are going to do, as the Prime Minister has repeatedly said, is we are going to take back control of our borders, of our laws and UK cash contributions. That’s the way forward.”
Irish Taoiseach Leo Varadkar said the DUP did not represent everybody in Northern Ireland.
“We need to bear in mind that there are a lot of different voices in Northern Ireland; we need to listen to them all, and all parties in Northern Ireland, not just one.”
He told the Dail parliament in Dublin that it was the ambition and wish of his government to begin phase two of the UK-EU talks to address post-Brexit trade and acknowledged it was in the Republic’s own interest.
“We want to move to phase two but if it is not possible to move to phase two next week then we can pick it up in the new year.”
He added that he stood by the text of a draft deal “agreed” on Monday.
Chancellor Philip Hammond revealed that the Cabinet has not yet had a full discussion of what should be the government’s preferred “endstate position” for the UK after Brexit.
Mr Hammond told the Commons Treasury Committee: “The Cabinet has had general discussions about our Brexit negotiations, but we
haven’t had a specific mandating of an end-state position. That is something that will be done first in the sub-committee constituted to deal with this issue, and logically that will happen once we have confirmation that we have reached ‘sufficient progress’ and are going to begin the phase-two process with the European Union. We are not yet at that stage and it would have been premature to have that discussion before we reach that stage.”
The chief executive of manufacturers’ organisation EEF Stephen Phipson warned that failure to secure a deal on the transition to post-Brexit status before Christmas could be “very costly” for the UK.
Speaking during a visit to Brussels to speak with MEPs, Mr Phipson said: “Companies in the UK and across the EU want to see a transition or implementation deal nailed down this side of Christmas.
“An opportunity to do so is in clear sight and political leaders across the spectrum must put the economic interests of the country front and centre in order to reach a sensible agreement.
“If this isn’t achieved, the ongoing uncertainty for business could be very costly for the UK in 2018.”
It emerged later that Mrs May would not be attending the commissioning ceremony for the Royal Navy’s new aircraft carrier HMS Queen Elizabeth today. The Prime Minister had been due to join the Queen and other VIPs at the event in Portsmouth.