A FUNDAMENTAL disagreement at the heart of the Tory Cabinet about the impact on the UK of crashing out of the EU without a deal has emerged just days before Article 50 is expected to be triggered.
Foreign Secretary Boris Johnson said he was confident Britain would “prosper” if no agreement was reached with the EU 27, while his colleague Liam Fox said such a scenario would be “bad”.
Their opposing views, given in television interviews yesterday, came as a leaked Treasury report warned exiting the bloc without a deal would cause “a major economic shock” to the UK while a separate Commons report called for contingency plans to be put in place to protect the country in such a scenario.
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MPs prepare to vote today on the Brexit Bill, potentially allowing the Prime Minister to begin the formal process of leaving as early as tomorrow and without any formal response to the Scottish Government’s demand for Scotland to be able to remain in the single market.
Theresa May has repeatedly said she would rather walk away from talks with EU leaders without a settlement than agree to a “bad deal”.
Fox, the International Trade Secretary, said failure to secure a deal would be bad for Britain. He told Sky News’ Ridge on Sunday: “Your substantive point about not having a deal of course would be bad. But it’s not just bad for the UK, it’s bad for Europe as a whole.”
Asked on ITV’s Peston on Sunday if the government was drawing up contingency plans in case there was no deal, Foreign Secretary Johnson said: “I think that actually, as it happens, we would be perfectly OK if we weren’t able to get an agreement, but I’m sure that we will”.
He added: “I don’t think that the consequences of no deal are by any means as apocalyptic as some people like to pretend.”
The leaked Treasury report warned the UK would be subject to tariffs and duties in the 53 World Trade Organisation (WTO) countries that the EU currently has free-trade agreements with, and questioned the ability of the UK to replicate the current terms that allow access to privileged markets. It also warned relying on WTO tariffs would have serious consequences for companies, jobs and food prices.
On the BBC’s Andrew Marr Show, Brexit Secretary David Davis said contingency plans were being worked on after the Commons Foreign Affairs Committee said it had seen no evidence of serious planning for the situation. Its report said ministers should order all Whitehall departments to draw up a “no deal plan”, warning failure to to do so would be a “serious dereliction of duty”.
Davis told Marr the UK would be ready if the negotiations “go wrong” and the preparations would stop the country going off “a cliff edge”.
He said: “The aim is to get a good outcome and I’m confident I’ll get a good outcome. One of the reasons we don’t talk about the contingency plan too much is we don’t want people to think this is what we are trying to do.”
Tasmina Ahmed-Sheikh, the SNP’s spokeswoman on international trade, said: “Just days before the UK Government triggers Article 50, the Secretary for International Trade is telling Sky News that no deal with the EU would be bad for the UK, and yet his government refuses to change the direction of their shambolic negotiating strategy.
“Experts across the board are telling us that anything less than membership of the single market would be a sub-optimal deal for the UK – but our Prime Minister has chosen not to listen.”
Carolyn Fairbairn, director general of the CBI, told BBC 5 Live Pienaar’s Politics: “The no-deal outcome we think shouldn’t be a plan B but should be more like a plan Z in terms of the government’s pecking order.”
The UK Government wants MPs to reject measures introduced by peers that would give parliament a ‘’meaningful’’ vote on the divorce deal and guarantees on protections for EU nationals living in Britain when they consider them today. The peers' demands are expected to be rejected, clearing the way for May to trigger Article 50 as early as Tuesday if the Bill is given Royal Assent.