Monday

11th Dec 2017

MPs urge May to put price tag on Brexit

  • "Without an economic assessment of 'no deal' having been done, the Government’s assertion that 'no deal is better than a bad deal', is unsubstantiated," MPs have said. (Photo: UK Parliament/flickr)

The British government's claim that no deal with the EU would be better than a bad deal is "unsubstantiated" because of a lack of proper analysis, a UK parliamentary committee has warned.

The House of Commons Brexit committee, in a report published on Tuesday (4 April), urged prime minister Theresa May to work out how much a no deal scenario would cost.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • Brexit minister David Davis admitted there has been no assessment of a no deal scenario (Photo: Num)

The committee also said it was important to avoid reaching a situation where no deal is concluded.

"The Government has talked about walking away from a bad deal, but has not yet explained what terms would be demonstrably worse for the UK than ‘no deal’," the Brexit committee said.

"The Government should therefore conduct a thorough assessment of the economic, legal and other implications of leaving the EU at the end of the Article 50 period with ‘no deal’ in place," it added, asking that the results of the assessment to be published.

"Without an economic assessment of ‘no deal’ having been done and without evidence that steps are being taken to mitigate what would be the damaging effect of such an outcome, the Government’s assertion that 'no deal is better than a bad deal', is unsubstantiated," the committee's report claims.

Too gloomy

However, MPs were split along party lines on backing the assessment, with pro-Leave MPs saying that the report was biased and "too gloomy".

In the end, the report was backed by 11 MPs to 6.

Last month, Brexit minister David Davis admitted in front of the committee that there had been no economic assessment of a "no deal" scenario since last June's referendum.

"I cannot quantify that in detail yet. I may well do in about a years' time," he told MPs in March.

Failing to reach an agreement "is not as frightening as some people think, but it is not as simple as some people think", Davis claimed.

Last year, the UK Treasury estimated that crashing out of the EU and trading with the bloc on World Trade Organisation (WTO) terms could cost the UK 7.5 percent in lost GDP growth by 2030.

The Brexit committee's report warns that “falling back on WTO terms would mean not just a return to tariffs, but the reappearance of non-tariff barriers".

More red tape

"That would mean more paperwork, border checks and bureaucratic requirements for British companies trading with the EU. For many businesses these can be far more costly than the actual tariff itself," it adds.

MPs also warned that negotiating a good free trade agreement - one that covers financial services - with the EU was vital, as trade in services accounts for 42 percent of the UK's exports to the EU.

"The Government will need to provide clarity on how it will address divergence in rules and standards, and resolve trade disputes, outside of the jurisdiction of the Court of Justice of the EU," they said.

The MPs warned that it is not yet clear if negotiations can be wrapped up within 18 months, as was set out by EU chief negotiator Michel Barnier, and before the two-year period ends, which is inscribed in Article 50 of the Lisbon Treaty.

The report also urges the government to keep the UK's migration policy flexible with the EU to "ensure that sectors currently reliant on EU workers do not face a sudden shortage of labour".

In January Theresa May said that the UK would rather walk away without any agreement rather than submit to difficult terms if the other 27 member states try to play hard with London.

In her letter invoking the exit procedure from the EU last week, May called for an ambitious free trade agreement with the EU, whereas the bloc's leaders have warned that those talks can only start on substance once the UK is out of the EU.

Tusk: No deal on Brexit would hit UK hardest

The European Council president warned the UK against getting cosying up to the idea of having no Brexit deal at the end of the divorce negotiations, as the EU gears up for receiving PM May's notification.

MEPs draw 'red lines' on Brexit deal

MEPs will stress that the UK and EU members have no right to conclude separate deals during Brexit talks, according to a draft resolution seen by EUobserver.

Brexit talks turn ugly on Gibraltar

Britain has said Spain can have no new powers over Gibraltar, as Brexit prompts hard talk on sovereignty, security, and borders.

Chief centre-left MEP says UK could still remain

Giannni Pittella, leader of the S&D group, says 'the door remains open' for the UK to withdraw its notification to leave the EU. However, the EU-27 have to agree to let the country stay.

May surprises EU with snap election

The UK prime minister has blamed the parliament for divisions in the country and called for a vote on 8 June, which she hopes will result in a pro-Brexit majority. The EU says the vote will not change its plans.

Analysis

What are the key points of the Brexit deal?

Here is a brief summary of the main points of the 'joint report', the outline of the Brexit divorce deal reached on Friday morning - and what still lies ahead.

EU leaders welcome Brexit divorce deal

British prime minister May's fellow leaders in Europe welcomed Friday's hard-won Brexit agreement on divorce, but Berlin in particular warned that the more 'highly complex' part of negotiations is to come.

Stakeholders' Highlights

  1. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  2. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  3. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  4. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  5. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  6. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  7. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  8. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  9. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties
  10. EPSUEU Blacklist of Tax Havens Is a Sham
  11. EU2017EERole of Culture in Building Cohesive Societies in Europe
  12. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage

Stakeholders' Highlights

  1. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  2. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  3. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  4. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  5. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  6. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  7. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  8. Dialogue PlatformThe Turkey I No Longer Know
  9. World Vision7 Million Children at Risk in the DRC: Donor Meeting to Focus on Saving More Lives
  10. EPSU-Eurelectric-IndustriAllElectricity European Social Partners Stand up for Just Energy Transition
  11. European Friends of ArmeniaSignature of CEPA Marks a Fresh Start for EU-Armenia Relations
  12. Nordic Council of MinistersNordic Energy Ministers Pledge to Work More Closely at Nordic and EU Level