Britain not bluffing on no-deal Brexit, says Liam Fox

Peter Walker Political correspondent

Emmanuel Macron is completely wrong to believe the UK government is bluffing over its talk of a no-deal Brexit, Liam Fox has said, as he insisted he would not publish studies detailing the potential impact of such an outcome on the economy.

Fox, the international trade secretary, said that while he would prefer Britain to reach a trade arrangement with the EU, he was not scared by the idea of no deal, which would lead to a default to World Trade Organisation trading terms.

“If we have no deal and we trade on current WTO terms, that’s the basis not only that Britain trades with countries like the United States, but that the EU trades with the rest of the world in most circumstances,” he told ITV’s Peston on Sunday show. “So it’s not exactly a nightmare scenario.”

At the end of an EU summit in Brussels last week, Macron described the increasing talk about no deal among some Conservatives as “noises, bluff, false information”.

Asked whether the French president was wrong to assume this, Fox replied: “Completely wrong about that.”

Fox said the impact of a no-deal Brexit on the UK economy would depend on mitigation efforts by the government. He said he would not publish impact studies, some of which are reported to predict a serious detrimental impact if a trade deal is not reached.

“Why would we publish data in a negotiation, that might actually diminish our negotiating hand?” Fox said.

Trade talks would only become complex if the EU wanted to “punish” the UK, Fox added.

“I don’t think they’re difficult in terms of the trade law or the trade negotiations themselves. The difficulty is the politics,” he said.

“In other words, how much does the European Commission and the European elite want to punish Britain for having the audacity to use our legal rights to leave the European Union? That’s the thing.”

The shadow foreign secretary, Emily Thornberry, has said a no-deal exit would be “a serious threat to Britain” and would be opposed by Labour. Any risk of it came mainly from Theresa May’s weak position, she told BBC1’s Andrew Marr Show.

“What we may be seeing is the Europeans making it clear it is not their fault that there are these difficulties. The intransigence does not come from their side, it comes from Theresa May’s side,” she said.

“The reality is, the intransigence is on Theresa May’s side because she doesn’t have the strength or the authority to be able to control her backbenchers, let alone her cabinet, and I think we are heading for no deal, and I think that is a serious threat to Britain, and it is not in Britain’s interest for that to happen. We will stop it.”

One of the main holdups in Brexit talks has been disagreement over what the UK must pay as a final exit settlement, with May facing backbench unrest if the bill creeps too high.

Fox said it was impossible to put a figure to the bill until wider negotiations had progressed. “I don’t know what that number is, but it’s very clear that we could only have that final number as part of a final agreement – we will want to know what the end status is.”

But in a further sign of attitudes in the government having softened since Boris Johnson said EU leaders could “go whistle” over any settlement, Fox declined to dismiss the idea that the sum could reach €50bn or €60bn.

“As David Davis has made very clear, we’re going through, line by line, exactly what it is the European Union say they they want,” he said. “And when we’ve done that we will conclude that negotiation as part of the broader package.”

Asked whether this meant the UK potentially paying a bill of about €60bn, Fox said: “I think you can draw any conclusion you like from what I’m saying.”

A leading pro-Brexit Tory backbencher gave a further hint of potential movement on the issue. Nigel Evans told BBC’s Sunday Politics that while there had been some “Enid Blyton figures” quoted, he accepted the need to pay more than the €20bn or so proposed for a two-year transition deal.

“Anything else above that should clearly relate to our contractual obligations. We want to make absolutely certain that Lord Peter Mandelson gets his pension into his old age,” he said, referring to Mandelson’s former role as an EU commissioner.

“Clearly there will be all sorts of people who work at the European Union. Their pensions need to be properly looked after.”

By using Yahoo you agree that Yahoo and partners may use Cookies for personalisation and other purposes