Brexit committee warns of impact of no deal being reached

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media captionTheresa May said the government is "looking at every scenario"

MPs have warned about the risks of the UK and EU failing to reach a Brexit trading agreement, urging ministers to work out how much "no deal" would cost.

The Brexit committee said Theresa May's claim that "no deal is better than a bad deal" was "unsubstantiated" until an economic assessment was published.

But the report divided the cross-party committee, with some members saying it was too pessimistic about Brexit.

Theresa May told the BBC the government was preparing for "all scenarios".

Mrs May, who last week formally triggered Brexit negotiations between the UK and the EU, said she had been "very clear that I want to get the best deal possible for the UK" and that failing to get a deal would not be "in the interests of either side".

The Brexit committee's report assesses the government's objectives for the negotiations that are to come over the next two years, as set out in a White Paper in February.

A total of 12 principles were set out, including migration control and "taking control of our own laws".

The report said: "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'."

It called for a "thorough assessment of the economic, legal and other implications" to be published, along with evidence of the steps "being taken to mitigate what would be the damaging effect of such an outcome".

media captionHilary Benn says ministers must explain why no deal 'is better than a bad deal'
media captionCould Brexit cause holiday apocalypse?

The MPs also said it said it was "essential" for Parliament to get a vote on whether to proceed if no deal was reached.

Labour MP Hilary Benn, who chairs the committee, told BBC Radio 4's Today programme: "If the government is going to make this assertion that no deal would be better than a bad deal, I think everyone would expect the government to have done some assessment."

He pointed out that farming tariffs, financial services and emergency health care in Europe were all issues that would all "fall by the wayside" with no deal.

"They should make an assessment. Because in the absence of the government explaining what mitigating measures it would take to deal with that outcome, to say that no deal is better than a bad deal is unsubstantiated," said Mr Benn.

He added there is a "balance to be struck" and "a difference between doing the work behind the scenes and making it public".

'Skewed and partisan'

Draft EU guidelines published last week rule out starting free trade talks with the UK before "sufficient progress" is made on other issues - the Brexit talks are scheduled to last two years.

The committee said it was possible that the current "convergence" between the UK and EU would mean talks could move more quickly than previous negotiations, but added: "It is not yet evident, however, that the two-year timetable for achieving this is realistic."

The report looks at different aspects of the EU talks, saying the status of EU nationals "cannot be left unresolved" until the end of talks and warning new migration controls should not damage the economy.

It also says the government has to recognise "differences in the negotiating priorities of the different parts of the UK".

Some MPs walked out of a private meeting of the committee as the report was being finalised, saying it was too "gloomy".

Six eventually voted against it, while 10 backed its publication.

Five Conservatives - including former ministers John Whittingdale and Dominic Raab - and Democratic Unionist Sammy Wilson voted against the report.

But they were outnumbered by 10 Labour, Tory, Liberal Democrat, SNP and SDLP committee members, all of whom backed Remain in last year's referendum.

'Devastating critique'

Mr Whittingdale said he thought the report was "unduly negative" and had "very much concentrated on the problems without really recognising the opportunities" of Brexit.

Mr Raab added: "The report was rushed, skewed and partisan. After two reports that had strong support, it's regrettable that this one split the committee.

"That undermines its credibility and influence, but I hope and expect the committee will learn the right lessons as we move forward."

But Lib Dem committee member Alistair Carmichael said the report was "a devastating critique of the shambles that is the Conservative Brexit strategy".

Mr Benn, responding to Mr Raab's criticism, said of the report: "It's fair, it's reasonable, it's based on the evidence."

Brexit Secretary David Davis said "a responsible government should prepare for all potential outcomes".

"We have also been analysing the impact of different scenarios on different sectors of the economy," he added.

"We are clear that no deal is not what we want or expect, but that it would be better than a deal which sought to punish the UK."

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