Yahoo News Sajid Javid refuses to rule out possibility of no-deal Brexit
Sajid Javid has refused to rule out a no-deal Brexit as he reiterated the Conservatives’ plans to bring the UK out of the EU in March 2020.
The chancellor was repeatedly asked on Thursday whether there was a possibility the UK could leave with no deal at the end of 2020. He said the chances of that were “extremely remote” but dodged several opportunities to rule it out.
He claimed the outline of a free trade agreement had already been worked out, saying: “By the end of 2020, we will have agreed and finalised the trade deal, a very ambitious, deep, comprehensive free trade agreement. And we will get that done also by the end of 2020.
“In the time that we’ve been negotiating over the last 100 days or so, it wasn’t just the exit agreement ... we have also negotiated and worked and agreed the outline of the ambitious free trade agreement.
“There is not a single doubt in my mind that it can be agreed within months, and we can get it through parliament by 2020.”
Asked what tariffs the car industry would pay under such a deal, Javid said: “Because it’s a deep, comprehensive free trade agreement, it’s zero tariffs, zero quotas, not just for the car industry, an agreement on services, having equivalents on financial services, we’ve set all this out.”
If the UK leaves the EU without a deal it would by default, become a “third country”, with no overarching post-Brexit plan in place and no transition period. The UK would no longer be paying into the EU budget, nor would it hand over the £39bn divorce payment.
The UK would drop out of countless arrangements, pacts and treaties, covering everything from tariffs to the movement of people, foodstuffs, other goods and data, to numerous specific deals on things such as aviation, and policing and security. Without an overall withdrawal agreement each element would need to be agreed. In the immediate aftermath, without a deal the UK would trade with the EU on the default terms of the World Trade Organization (WTO), including tariffs on agricultural goods.
The UK government has already indicated that it will set low or no tariffs on goods coming into the country. This would lower the price of imports – making it harder for British manufacturers to compete with foreign goods. If the UK sets the tariffs to zero on goods coming in from the EU, under WTO “most favoured nation” rules it must also offer the same zero tariffs to other countries.
WTO rules only cover goods – they do not apply to financial services, a significant part of the UK’s economy. Trading under WTO rules will also require border checks, which could cause delays at ports, and a severe challenge to the peace process in Ireland without alternative arrangements in place to avoid a hard border.
Some no-deal supporters have claimed that the UK can use article XXIV of the General Agreement on Tariffs and Trade (Gatt) to force the EU to accept a period of up to 10 years where there are no tariffs while a free trade agreement is negotiated. However, the UK cannot invoke article XXIV unilaterally – the EU would have to agree to it. In previous cases where the article has been used, the two sides had a deal in place, and it has never been used to replicate something of the scale and complexity of the EU and the UK’s trading relationship.
The director general of the WTO, Roberto Azevêdo, has told Prospect magazine that “in simple factual terms in this scenario, you could expect to see the application of tariffs between the UK and EU where currently there are none”.
Until some agreements are in place, a no-deal scenario will place extra overheads on UK businesses – eg the current government advice is that all drivers, including lorries and commercial vehicles, will require extra documentation to be able to drive in Europeif there is no deal. Those arguing for a “managed” no deal envisage that a range of smaller, sector-by-sector, bilateral agreements could be quickly put into place as mutual self-interest between the UK and EU to avoid introducing or to rapidly remove this kind of bureaucracy.
Painting a stark choice between a Tory majority government and a “chaotic” coalition following a hung parliament, the chancellor restated his party’s key pledges to increase spending on the NHS and schools, recruit more police officers and raise the threshold at which people begin making national insurance contributions.
Despite leaving open the possibility of the UK crashing out of the EU, Javid stressed the UK would secure a trade deal with the bloc by the end of next year and said a zero-tariff deal had been agreed in principle, though he admitted there was still “some detail” to discuss.
“Nobody wants a no-deal Brexit,” he told BBC Radio 4’s Today programme. “Every business I speak to, their fears are the uncertainty around Brexit. They want that to end. They want the deal to go through.”
He added: “We are getting on with Brexit. We are delivering our exit from the EU. We’ve agreed a fantastic new trade deal with the EU. Businesses are also absolutely petrified of a Jeremy Corbyn government.”
Tory ambitions to pass a tax-cutting, post-Brexit budget within 100 days of taking office have been dismissed by opposition parties, who cast doubt on the feasibility of the timetable. The Liberal Democrats described the plan as “pure fantasy” and accused Boris Johnson of lying to the public.
It was put to Javid that Johnson had only managed to secure a new Brexit deal by agreeing to a customs border in the Irish Sea – which had previously been a major red line – but he did not respond to that point.
Asked whether he would have written an article comparing veiled Muslim women to letterboxes, as Johnson had, Javid refused to criticise his party’s leader.
“I don’t write articles,” he said. “He was a journalist and he’s written lots of articles, as he’s said himself, people can pick one word out or another but what matters is the kind of prime minister he’s going to be.”
His comments came a day after it emerged that Johnson had claimed that children of working mothers in low-income families were more likely to “mug you on the street corner”.
Javid, a former Deutsche Bank director, was also asked whether the Conservatives were ashamed of rising homelessness under the party. He sought to deflect blame towards Labour, which had claimed government policies had been “directly responsible” for people living and dying on the streets.
“I care deeply about the worst off in our society,” Javid told Sky. “Homelessness reached its peak in 2008 under the last Labour government, since then it’s down by almost a half. There’s still a long way to go, we’ve still got work to do, but it’s Labour that was responsible for the massive rise in homelessness.”
Javid also restated Tory plans to introduce an Australian-style points-based system for immigration. “We have a right to control our borders and that’s what you’ll get with the Conservatives, is this Australian-type system,” he said.
“It will mean we will have immigration, of course we will, and immigration – I say this as a second-generation migrant myself – has benefited our country immensely in so many ways.”
