Sajid Javid refuses to assess economic dangers of Brexit plan
Sajid Javid has rebuffed MPs’ demands for the Treasury to carry out a thorough economic assessment of the government’s Brexit deal, claiming it is “selfevidently in our economic interest”.
The chancellor has written to MPs on the cross-party Treasury select committee, which requested a fresh analysis in order to help MPs judge whether to support the deal. Javid suggested ending the uncertainty that has surrounded the issue of Brexit would in itself be beneficial to the economy – and rejected the idea that the government should carry out a new analysis and then make it available to MPs.
“My starting point is that agreeing the withdrawal agreement is self-evidently in our economic interest,” he said. “It would bring an end to the damaging uncertainty and delay of the past years and allow businesses to get on with taking decisions, including around recruitment and investment.”
The cross-Whitehall economic analysis published last year suggested the economy would be considerably weaker under a free trade agreement (FTA) – the type of relationship targeted under Boris Johnson’s latest deal.
But Javid said those forecasts only considered a “generic, ‘average’, FTA, looking at examples from around the world”. He suggested the shape of the UK’s FTA with the EU would only become clear during the course of the negotiations, once Brexit had happened. John McDonnell, the shadow chancellor, said: “Flying blind on a massive decision on the future of the economy is no way for a government to make recommendations to parliament or make legislation. It’s preposterous behaviour by the chancellor and this
government.”
Independent analysis by the UK in a Changing Europe thinktank suggested Johnson’s plan would knock between 2.3% to 7% off GDP over the next decade, compared with remaining in the EU. The equivalent estimates for Theresa May’s deal were 1.9% to 5.5%.
But in stark contrast to the cautious stance associated with his predecessor Philip Hammond, who was referred to by colleagues as “Spreadsheet Phil”, Javid played down the importance of economic forecasts for judging the value of the Brexit deal.
“Trust in democracy, and bringing an end to the division that has characterised this debate over the past three years, is something that cannot be measured solely through spreadsheets or impact assessments, important though they are,” he wrote. “Respecting the referendum and closing this chapter so we can focus on delivering growth, and the public services people deserve, is the right thing to do for our country.”
Anand Menon, the director of UK in a Changing Europe, said: “It is a shame that the chancellor seems to feel that evidence is now superfluous to good policy making. Self evidently there is more at stake here than just economics. That being said, surely we deserve to know the different potential implications of different kinds of Brexit?”
Torsten Bell, the director of the Resolution Foundation thinktank, said:
“The chancellor is right to say lots of other things will affect what the economic outcome for Britain is. But what is true is that every major study done inside or outside government shows that a looser relationship with the EU, as envisaged in this agreement, leads to a smaller economy than it would otherwise be.”
The full text of the withdrawal agreement bill, which the government hopes to rush through parliament in order to leave the EU on 31 October, is expected to be published on Monday evening.
Javid is due to hold a budget on 6 November, if Brexit goes ahead next week, and the independent Office for Budget Responsibility will then present updated economic forecasts, though it is unclear whether they have enough time to analyse the details of the Johnson deal.
In the Commons, Labour’s Ian Murray said he was unable to answer his constituents who ask about the impact Johnson’s deal would have on their finances because the Government is “refusing to publish an economic impact assessment”.
Brexit secretary Stephen Barclay replied: “The answer is to listen to the Bank of England governor who says that getting this deal passed will be a boost to our economy.”
Catherine McKinnell, Labour MP for Newcastle upon Tyne North, said MPs were being “left in the dark” about the economic impact of the new Brexit deal.
Responding, Barclay said: “The reality is that any modelling for the future would have to take on board what is the future direction of the (EU) Commission under the new leadership, it would have to consider what actions the UK Government would take in response.”