But the British public and its elected representatives need fact-based evidence to inform the hard choices that lie ahead. It would be the height of irresponsibility to ask the House of Commons to vote on any prospective Brexit deal without a clear idea of its impact on the economy. The Treasury is known to have conducted “impact assessments” on several models of Brexit — examining how 50 sectors of the UK economy would be affected.
Despite persistent calls from Conservative and Labour MPs, these documents have been kept private, ostensibly to avoid undermining Britain’s negotiating hand, according to David Davis, the Brexit secretary. This argument is spurious, as the EU will have analysed the UK’s options and understands which ones are realistic.
There are four broad paths for the UK’s immediate future after Brexit day in March 2019. The first is a standstill transition, which will retain the UK’s membership of the EU single market and customs union for the immediate future. This was mooted by Mrs May in her Florence speech and is preferred by most businesses. It would deliver the most certainty and lessen the risk of a shock to the UK’s economy.
The second is an exit that continues membership of the customs union during the transition period but stops short of full single market membership. This option, suggested by Manfred Weber, leader of the centre-right European People’s party, would risk immediate damage to the UK’s services sector.
Some licenses could be phased out gradually but it would be far from business as usual. If the negotiations under Article 50 fall apart, there are two “no deal” scenarios. Both risk an economic shock. The first is a negotiated no deal, which could see the UK retaining membership of some regulatory agencies — such as the European Aviation Safety Agency and Euratom.
But on trade with the EU, the UK would flip straight into World Trade Organisation terms — raising tariffs and, more importantly, non-tariff barriers. Or there is the most disorderly scenario: a non-negotiated no-deal Brexit with no formal agreement between the UK and the EU. This last option is often canvassed by hardline Brexiters who want Britain out of the EU whatever the cost. Their refrain that “no deal is better than a bad deal” is empty and economically illiterate, obscuring the reality of a serious shock to the UK and administrative chaos.
If the Treasury were to publish the documents, some Brexit supporters would inevitably cry foul. They would argue that the Treasury was wrong in its short-term projections before the EU referendum last year and could be wrong again. The crucial difference, however, is that those assessments were released in the heat of a referendum campaign and further hyped by the then-chancellor George Osborne.
The Brexit debate is simply too important to be conducted in the dark. There is too much airy talk about what kind of post Brexit model sounds right. For the City of London or the aviation industry, for example, the standstill route is likely to have very different consequences to a “no deal” exit. It is in Mrs May’s instincts to keep such information private.
Yet the magnitude of Brexit requires a different approach. This is not a repeat of Project Fear to scare the public about Brexit. It amounts to Project Fact — an informed debate about which options are best for the UK and least harm economic growth. In short, let there be light.
Source: Financial Times