No-deal Brexit would cause 'severe disruption' to economy and jobs, MPs warn

Benjamin Kentish

A no-deal Brexit would not be pursued by any "responsible" government because of the "severe disruption" it would cause, an influential committee of MPs has warned.

The House of Commons Brexit committee said leaving the EU without an agreement would put jobs and livelihoods at risk.

It also dismissed Boris Johnson's suggestion that a no-deal Brexit could be offset by using the provisions of an obscure trade treaty.

Mr Johnson, the favourite to take over as prime minister next week, has promised to deliver Brexit by 31 October "do or die", even if this means taking the UK out of the EU without an exit deal.

Earlier this week he said one of his first acts as prime minister would be to launch a public information campaign to make sure that people were prepared for "all the possible risks" of a no-deal Brexit.

The Brexit committee dismissed suggestions from Mr Johnson and others that threatening no deal would force the EU to renegotiate the current withdrawal agreement.

The MPs said: "This is, at best, a gamble. At worst, it could lead to severe disruption of the economy, pose a fundamental risk to the competitiveness of key sectors of the UK economy, and put many jobs and livelihoods at risk."

They added: "The government’s own analysis reinforces our previous conclusion that attempting a “managed no deal” cannot constitute the policy of any responsible government."

The committee said the pharmaceutical industry had made clear that no deal would be a "leap into the unknown", would prove a risk to patient safety and would ramp up drug prices for the NHS.

The MPs also warned that there would likely be "interruptions to food supplies in respect of certain products" because of the "disastrous" impact of no deal on UK farming.

They said no deal would mean "creating circumstances that incentivise the UK services industry to relocate" parts of its business to the EU, and warned that the UK would "risk a great deal of goodwill" by leaving without a deal.

Mr Johnson has repeatedly claimed that current trading terms between the UK and the rest of the EU could be maintained under Article 24 of the General Agreement on Tariffs and Trade (GATT) while a future trade deal is negotiated.

But the committee said of the so-called GATT 24 clause: "It requires an agreement between the two parties, a plan as to how the end state will be reached, and for this agreement to notified to all parties to the World Trade Organisation.

"By definition leaving without a deal means there is no agreement.

"Article 24 does not provide a means to mitigate the risks to EU-UK trade in the event of a no deal exit."

Labour MP Hilary Benn, who chairs the committee, said: “A no deal Brexit, with no GATT 24 agreement, would be at best a foolhardy gamble and at worst, lead to severe disruption, and it is neither desirable nor sustainable as an end state for our economic relations with the EU.

“This clear evidence reinforces our previous conclusion that a ‘managed no deal’ cannot constitute the policy of any responsible government.”

It came as the Office for Budget Responsibility warned that a no-deal Brexit could push the UK's economy into recession and drive up borrowing by £30bn a year.