Brexit’s economic impact? U.K. has never assessed it – Business


The U.K. official shepherding Britain’s departure from the European Union acknowledged Wednesday that the government has made no formal assessments of the economic impact of leaving the 28-nation bloc.

Brexit Secretary David Davis told a parliamentary committee Wednesday that the nation should be prepared for a profound shift in the way the economy operates on a scale similar to that of the 2008 financial crisis.

He says that since Britain must prepare for a “paradigm change,” in the economy, any assessment in the automotive, aerospace financial services or other sectors would fail to be “informative.”

‘Rather strange’

The House of Commons’ Brexit committee’s chair, Hilary Benn, described the decision as “rather strange” given the momentous decisions at hand and since authorities wish to start renegotiating Britain’s trade relations with the rest of Europe within weeks.

“You have said there are no impact assessments,” Benn said. “You were hoping that, at the October (European) Council, the door would be open to phase two of the negotiations, where the question would be asked ‘What does the U.K. government want?’

House of Commons’ Brexit committee’s chair Hilary Benn was surprised to learn there was no assessment. ‘Are you actually telling us that the government hadn’t at that point — and still hasn’t — undertaken the assessment?’ (Neil Hall/Reuters)

“Are you actually telling us that the government hadn’t at that point — and still hasn’t — undertaken the assessment?” Benn asked.

Davis told the committee he didn’t need a formal impact assessment.

“I’m not a fan of economic models because they have all proven wrong,” Davis said. “When you have a paradigm change — as happened in 2008 with the financial crisis — all the models were wrong.”

Britain and the EU on Monday came close to agreeing on key divorce terms, including how to maintain an open Irish border after the U.K. — including Northern Ireland — leaves the EU.

Irish border question

But the agreement was scuttled at the last minute when the Democratic Unionist Party, which props up Prime Minister Theresa May’s minority government, warned it wouldn’t support a deal it saw as undermining Northern Ireland’s place in the United Kingdom.

Foreign Secretary Boris Johnson said that a solution to the issue “can only be discovered in the context of discussions on the end state of the U.K.’s relations with the rest of the EU.”

“We are going to take back control of our borders, of our laws and of U.K. cash contributions and that’s the way forward, and we will come up with a solution,” he added.

May was expected to hold talks with top EU officials later this week.

Britain and the EU have only days to clinch a deal on borders, Britain’s financial settlement with its EU partners and the rights of citizens hit by Brexit before a Dec. 14-15 EU summit that will decide whether Brexit talks can move on to future relations and trade.

The lack of progress so far has raised concerns that Britain may not have a deal by the time it officially leaves on March 29, 2019, and heightened fears that May’s government could collapse.


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