Leaving the EU: No Deal

Oral Answers to Questions — Treasury – in the House of Commons on 29th January 2019.

Alert me about debates like this

Photo of Stephen Timms Stephen Timms Labour, East Ham

What assessment he has made of the potential effect on consumer prices of new non-tariff barriers in the event that the UK leaves the EU without a deal.

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

Last year, the Government published a comprehensive assessment of the impact of our departure from the European Union, covering four different scenarios and looking at the effect on GDP and GDP per capita on exports and imports. That analysis is available on gov.uk.

Photo of Stephen Timms Stephen Timms Labour, East Ham

The British Retail Consortium estimates that if we leave the EU without a deal, new non-tariff barriers will add on average 29% to the cost of food imports from the EU, on top of new import duties on food. The Chancellor was surely right in his call to business leaders to argue for no deal to be taken off the table. Will he continue to press the Prime Minister to do so?

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

What we will continue is our extensive planning for the possibility of a no deal, day one exit to make sure that our ports are indeed flowing and goods are moving, including food. But the best way to ensure that we have the right conditions for UK consumers is to back the deal that has been negotiated with the European Union.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Will the Minister confirm that, in the event of a no-deal Brexit, we would immediately be able to eliminate VAT on domestic fuel and reduce tariffs on foods imported from outside the European Union to zero?

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

This country will achieve a range of additional flexibilities when we are outside the European Union. We will, of course, assess them all in due course, taking into account the fiscal costs of some of the measures that my hon. Friend has raised.

Photo of Debbie Abrahams Debbie Abrahams Labour, Oldham East and Saddleworth

The CBI and many others have warned that leaving the EU with no deal will exacerbate existing regional economic inequalities. The north-west alone is predicted to lose £20 billion a year in a no-deal scenario. That will, of course, impact on jobs, not least the 350,000 that are linked to EU exports, 14,000 of which are in my constituency of Oldham East and Saddleworth. So will the Chancellor and the Government as a whole once and for all rule out a no-deal Brexit scenario, which would harm the country as a whole and particularly my constituents and the north?

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

The simple reality of the situation that Parliament finds itself in is that, in the event that we do not conclude a deal successfully with the European Union, this country may well leave without a deal. I urge the hon. Lady, in order to address the concerns that she has rightly raised in this House, to get behind the deal.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

Will the Minister confirm that the Government have no plans for any new non-tariff barriers and call out the British Retail Consortium’s recent “Project Fear” comments? Will he also confirm that it is within the Government’s power, after we leave, to reduce tariff barriers and tariffs on food and clothing?

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

My hon. Friend raises two issues. On non-tariff barriers, we have made it very clear that we will implement a solution in the event of no deal, for example, that will be as friction-free as possible. But there will be requirements in that scenario for us to handle pre-custom declarations and various checks, which will come with having a border under those circumstances with the EU27. On our tariff policy, we will come to that in due course.

Photo of Anneliese Dodds Anneliese Dodds Shadow Minister (Treasury)

Stockpiling by business is at its second highest rate since 1992. The Treasury suggests that new customs paperwork for no deal would cost UK business £13 billion. When will the Minister’s boss, the Chancellor, stop arguing privately against no deal’s staying on the table and publicly take on the scorched-earth fantasists in his own party?

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

The questions I have just responded to are in a similar vein and all lead back to one conclusion, which is that, if we are to avoid a no-deal scenario, there has, by definition, to be a deal that is agreed with the United Kingdom. We have a very good deal that the Prime Minister has negotiated and will be negotiating further with the European Union. It sees us respecting the outcome of the 2016 referendum but, most importantly, making sure that flows across our borders are as frictionless as possible.