The UK should assess the impact of ‘no deal’ on Brexit

In one of the more memorable clips from Parliament in recent months, Exiting the EU Committee Chairman Hilary Benn took David Davis, Secretary of State for Exiting the EU, through a series of questions about the consequences of “no deal”. At that session, Davis conceded that his department had not made an assessment of that option.

Unsurprisingly, the committee’s latest report does not accept the Government’s argument that this cannot be assessed. Some of the committee’s members staged a walk out rather than sign up to the report.

The Prime Minister made clear that she believes “no deal would be better than a bad deal”. In negotiating terms, having a walk-away option is helpful; indeed, people have ascribed David Cameron’s desperation to renegotiate a deal as a reason why he had to settle for a package that he could not sell.

But that does not mean they should not assess the no deal option. Indeed, ministers need to have a view on how “bad” a deal would have to be to be worse than no deal at all. Otherwise they have no bottom line.

A more reassuring answer from Davis would have been that the Government has done such an assessment, and is working through potential mitigations, but cannot disclose this for fear of giving away a negotiating card (though there is nothing stopping the EU side from making its own assessment). 

Where the committee might have pressed more productively is on the choices the Government has already made and presented in the Prime Minister’s Lancaster House speech and the Brexit White paper, for example, the decision to leave the EU Customs Union. It is possible to argue that leaving the Single Market is an issue of principle: an acceptance that the EU27 would refuse to allow staying in without ECJ jurisdiction and free movement.

The argument for coming out of the Customs Union is dependent on a belief that the costs (including the complexity at the Irish border) can be mitigated through “new customs arrangements” and that those costs will be outweighed by the benefits of future trade deals the UK can negotiate off its own bat. 

Ministers hopefully took that decision based on a hard-headed analysis of the pros and cons, including the feasibility of those new customs arrangements. There is no reason for David Davis not to disclose that analysis. At the moment the only assessments from government on the merits of different post-Brexit trade options are the ones conducted by the Treasury that predate the referendum.

Going forward, Parliament – and the wider public – will be presented with a lot more decisions on the shape of Brexit. The Government’s record so far is to only concede the minimal amount of information under a degree of duress. Indeed, the committee’s report draws attention to the unresponsive engagement with the devolved administrations on their own proposals.

We argue that the Government needs to provide Parliament with full, early information, including proper impact assessments, to allow for scrutiny before legislation.

It is in everyone’s interest that the Government makes the best choices for post-Brexit Britain. Members of Parliament – whether they supported Leave or Remain – must insist that the Government does a better job than it has so far in exposing its reasoning.